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Accounting & Management
Product innovation agility on business performance:
The role of market and learning orientation
Agilidad de innovación de productos en el rendimiento empresarial:
el papel del mercado y la orientación al aprendizaje
Mulyana Mulyana*, Sutapa Sutapa, Wasitowati Wasitowati
Universitas Islam Sultan Agung, Indonesia
Received December 17, 2018; accepted September 11, 2019
Available online September 10, 2019
Abstract
This paper aims to investigate the effect of market orientation (MO), product innovation agility (PIA)
and Learning orientation (LO) on business performance (BP). Data were collected from 205 creative
industries in Indonesia and were analyzed by using Structural Equation Modeling (SEM). The result
shows that market orientation, product innovation agility and learning orientation affect business per-
formance. Furthermore, product innovation agility mediates the correlation of market orientation and
learning orientation on business performance. This paper contributes to solve the results of previous
studies on the relationship between market orientation, learning orientation and business performance.
JEL code: M31, L25
Keywords: Market orientation; Learning orientation; Product innovation agility; Business
performance
* Corresponding author.
E-mail address:mulyana@unissula.ac.id (Mulyana).
Peer Review under the responsibility of Universidad Nacional Autónoma de México.
http://dx.doi.org/10.22201/fca.24488410e.2020.2367
0186- 1042/©2019 Universidad Nacional Autónoma de México, Facultad de Contaduría y Administración. This is an open access
article under the CC BY-NC-SA (https://creativecommons.org/licenses/by-nc-sa/4.0/)
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Resumen
Este documento tiene como objetivo investigar el efecto de la orientación al mercado (MO), la agilidad
de innovación de productos (PIA) y la orientación al aprendizaje (LO) sobre el rendimiento empresarial
(BP). Se recopilaron datos de 205 industrias creativas en Indonesia y se analizaron mediante el modelo
de ecuaciones estructurales (SEM). El resultado muestra que la orientación al mercado, la agilidad en
la innovación de productos y la orientación al aprendizaje afectan el desempeño empresarial. Además,
la agilidad de la innovación de productos media la correlación de la orientación al mercado y la orien-
tación al aprendizaje en el desempeño empresarial. Este artículo contribuye a resolver los resultados de
estudios previos sobre la relación entre orientación al mercado, orientación al aprendizaje y desempeño
empresarial.
Código JEL: M31, L25
Palabras clave: Orientación del mercado; Orientación al aprendizaje; Agilidad de innovación de pro-
ductos; El rendimiento del negocio
Introduction
The creative industries signicantly contribute to economic development, especially in
providing jobs and increasing people’s salary. The creative industries development needs
support and guidance to compete in the global market. With various limitations, they should
innovate and have learning oriented in this dynamic environment. Creativity and innovation
are indispensable for creative industries to grow and develop. Good creative industry players
include of individuals who have ability to take on challenges, have a strong desire to achieve
business goals (Abi and Abdul, 2011).
The role of market orientation and learning orientation require innovation agility to im-
prove business performance. Creativity and agility of product innovation in nding the new,
unique and different ideas are needed to compete in market. Market orientation is a company
resource that can lead organizations to create sustainable competitive advantage. It involves
customers, competitors and internal coordination among its functions. Marketing activities
on market orientation should understand the organizational culture of the company in order
to get support from the organization members in preparing the company’s strategy. Mar-
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ket-oriented business activities can enhance innovation and business performance (Suliyanto,
2012). Learning orientation is one of the strategies for strengthening innovation and as an
open mindset that encourages business performance improvement (Martinette et al, 2012).
The dynamics of competition increase tightly so that creativity and innovation are needed
to adjust to environmental changes. Market learning orientation in creative industry becomes
a necessity and should be done with a strong commitment to achieve the vision and goals.
Learning orientation and continuous product innovation for the creative industry are needed
to compete and improve performance in adapting to the global markets.
Some previous studies showed inconsistent results. Market orientation can improve business
performance (Kohli, 1993; Takata, 2016; Zainul & Utami, 2016; Kaswuri, 2016; Masa’deh et
al., 2018; Herman & Arafah, 2018; Bhattarai & Tasavori, 2019). Other studies showed that
market orientation is not able to improve business performance (Keskin, 2006; Mahmoud
et al., 2016; Solano & Collado, 2018; Idrus & Abdussakir, 2018). Likewise, proactive mar-
ket orientation cannot improve business performance while responsive market orientation
can improve business performance (Kocak & Oazoglu, 2017). The dimensions of market
orientation, namely customer orientation and competitor orientation have no effect on busi-
ness performance while inter-functional coordination has an effect on business performance
(Migdadi et al., 2017). Customer orientation and competitor orientation can improve business
performance, while interfunctional coordination is not able to improve business performance
(Ansah & Chinomona, 2017).
Study show that learning orientation can improve business performance (Aloulou, 2018).
Learning orientation can encourage organizational performance, such as the speed of shipping
of goods, cost efciency, quality of trust and future performance of the company (Tajeddini,
2016). Other studies show different results, learning orientation is not able to improve business
performance (Dutta et al., 2017; Ebrahimi et al., 2018). Several studies on innovation have
been carried out by previous researchers, for example, product innovation and environmentally
friendly processes (Chang, 2011), process innovation and product innovation (Shu and Xiao,
2016), incremental and radical innovation (Kocak et al., 2017), exploratory and exploitative
innovation (Wagner et al., 2018). In this study, it focuses on product innovation agility.
The purpose of this study is to examine the inuence of market orientation, product in-
novation agility, learning orientation on performance. It is important to conduct this research
because the gap from the results of previous studies could be solved. Furthermore, the result
of this study is expected to contribute the development of creative industries in facing the
tight competition in the global market.
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Literature Review
Business Performance
Venkatraman (1986) stated that the Concept of measuring business performance using a variety
of schemes has advantages and limitations so that business performance measurement can
adopt the most appropriate approach. Sin & Lee (2002) used indicators of customer retention,
sales growth, market, return on investment and overall performance to measure business per-
formance. Furthermore, Nwokah & Maclayton (2006) stated that business performance can
be measured through indicators of corporate prots, market share and sales growth achieved
by the company. Sin & Tse (2006) describe the way to measure business performance through
aspects such as sales growth, customer retention, return on investment (ROI), market share,
trust, customer satisfaction, and sales return.
Business performance is a combination of nancial and marketing performance (Sulistyo
& Siyatinah, 2016; Jaakkol et al., 2010; Jogaratnam, 2017). Market performance describes
efforts to increase market share and sales volume, while nancial performance describes nan-
cial measures, such as prot margins, return on investment that has been achieved. Sharabati
et al (2010), business performance can be measured through protability, productivity and
market valuation. Najib & Kiminami (2011), explained that sales volume, protability and
market share are indicators for measuring business performance. Furthermore, Nuryakin et al.
(2018) stated that business performance is a result of the organization’s operational activities
which include the achievement of internal and external results. Business performance was
measured through the performance of sales volume, sales growth, protability and market
share. This business performance study is measured through return on assets, growth prot,
sales growth, and market share growth.
Market Orientation
Slater & Narver (1990) explained that market orientation was identied into three components:
customer orientation, competitor orientation and inter-functional coordination. Customer
orientation is expected to understand the target buyer timely to create superior value. Com-
petitor orientation aims to get information on the main competitors and potential competitors
and understand the strengths and weaknesses of competitors in the short and long term. In-
ter-functional coordination is used in order the human resources can be well coordinated to
create superior value for the target market.
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Kohli and Jaworski (1993) denes market orientation as the construction of three com-
ponents of activity, including generational intelligence, market intelligence dissemination
and organizations responsive to disseminated intelligence. Furthermore, market orientation
will gain market knowledge and respond as quickly as possible so that it can create a good
performance for the company. Wan & Muhammad (2013) explained that market orientation is
a dynamic component and can improve company performance. Kocak et al., (2017) states that
market orientation can be responsive and proactive as an antecedent of business performance.
Learning Orientation
Huber (1991) explained that learning orientation is the development of new knowledge that
will have an impact on values and beliefs. Sinkula & Baker (1997), learning orientation is
a concept that involves organizational values so that they tend to create new knowledge.
Learning orientation can be measured through three dimensions: commitment to learning,
open-mindedness and shared vision (Sinkula & Baker, 1997), dene learning orientation as
an organizational activity to develop and increase knowledge in order to create competitive
advantage and can improve company’s innovativeness. Martinette (2006) explained that
learning orientation is done with a strong commitment that will make it easier to achieve
the vision and goals as well as improve business performance. Tajeddini (2016) states that
learning orientation is the ability and willingness to continue learning which can increase
trust, cooperation, and cost efciency for the company.
Product innovation agility
Raschke & David, (2005) said that agility is a dynamic ability to modify and recongure
business processes that are selected from a series of business process capabilities to accom-
modate the needs and potential of the company. David et al. (2016) explained that agility is
the capacity of an organization to efciently and effectively direct human resources to create
and protect the value obtained in the face of environmental changes. Holbeche (2018) denes
agility as the ability of organizations to respond and adapt quickly to environmental changes.
Furthermore, the main principles of agility are the focus of a strong future, anticipation, and
response to trends and threats, collaboration with customers, innovation, and empowerment.
Agility needs change that must be supported by all parties so that the continuity of learning
is needed (Holbeche, 2018). According to Kuncoro & Suriani (2018), product innovation is
the overall operation of the company to create new products including all processes carried
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out. In this study, product innovation agility is the organization’s ability to product innovation
effectively and efciently to respond the environmental changes.
Hypotheses development and empirical research model
Market Orientation and Product Innovation Agility
Agility becomes as a key to develop new products in order to be able to meet market needs
(Schuh et al., 2017) and agility has a strong relationship with radical product innovation
(Oliveira, 2017). Likewise, proactive market orientation can encourage the creation of radical
innovation (Kocak et al., 2017) and improve innovation capabilities (Lakshman & Adhikari,
2017). Studies show that market orientation can improve innovation (Suliyanto, 2012; Remli
& Muhammad, 2013). In small and medium enterprises, the high market orientation will
improve the product innovation, process innovation, market innovation and management
innovation. Companies that try to understand the market will be encouraged to meet product
needs according to customer desires so that they are motivated to increase product innova-
tion capabilities. Customer orientation policy by understanding customer expectations and
feedback can drive the organization’s speed and agility to innovate new products (Elkareem
et al, 2011). Therefore, in an effort to meet product needs based on customer expectations
better, understanding competitors and inter-functional coordination are likely to encourage
product innovation agility.
H1: Market orientation signicantly affects product innovation agility.
Learning orientation and product innovation agility
Learning orientation is related to innovation that can be implemented in the form of ideas,
processes, products, and services (Day, 1994). Learning orientation can improve company’s
innovativeness (Mahmoud, 2016). Companies that have a commitment to market learning
orientation will be motivated to realize product innovation capability. All learning orientation
activities will contribute to improve product innovation capabilities. Learning orientation
can enhance experience and knowledge so that it can increase the agility of new product in-
novations (Elkareem et al, 2011). Learning orientation encourages the success of corporate
innovation (Mahto et al., 2018) and has an effect on improving product quality, production
exibility and speed of new product promotion (Huang & Li, 2017). The ability to learn from
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experience and failure can affect innovation agility (Carmeli & Dothan, 2017). Therefore,
the willingness to learn and gain new knowledge in realizing product innovation based on
market needs will encourage product innovation agility.
H2: Learning orientation signicantly affects product innovation agility.
Market orientation and business performance
The relationship between market orientation and business performance has been done in some
studies. Studies show that market orientation can positively improve company performance
(Kohli & Kumar, 1993; Takata, 2016; Zainul et al., 2016; Kaswuri et al., 2016; Nikraftar &
Momeni, 2017; Ho, Nguyen et al., 2018; Bhattarai et al., 2019; Musa et al., 2019; Fernan-
des et al., 2019). Market orientation is also a determinant of the business performance of
women entrepreneurs (Aliyu & Nordin, 2019). Market orientation contributes to improve
business performance when facing turbulent environmental changes (Bereket, 2017) and it
is the antecedents of marketing performance and nancial performance (Tajeddini & Ratten,
2017). Likewise, responsive market orientation can improve company performance (Kocak
et al., 2017). Therefore, companies that are able to develop marketing programs well through
customer orientation, competitor orientation and inter-functional coordination, can improve
business performance.
H3: Market orientation signicantly affects business performance
Learning orientation and business performance
Studies show that learning orientation can improve business performance (Aloulou, 2018;
Nikraftar & Momeni, 2017). Effective learning orientation can improve nancial performance
(Chen & Wey, 2017) and encourage better organizational performance in terms of speed of
product delivery, cost efciency, quality of trust and future performance (Tajeddini, 2016).
Learning orientation can improve company performance (Dutta et al., 2016; Tajeddini,
2016) and can improve the new products performance (Li, 2017). Learning orientation and
innovation must be encouraged in order to improve the better performance. A high level of
learning orientation and innovation will encourage organization’s quality, cost efciency and
condence in high performance (Tajeddini, 2016). Therefore, market learning orientation in a
company can improve business performance. Likewise, company activities market-oriented
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will encourage learning organizations that are always based on market-oriented so that they
have an impact on business performance.
H4: Learning orientation signicantly affects business performance.
Product innovation agility and business performance
Product innovation is one determinant of business performance (Mahmud & Hasyim, 2018;
Herman et al., 2018). The speed of product innovation will affect the success of the product
in the market and have an impact on improving the company performance, such as the growth
of market share, sales, and prots (Mitrega et al., 2017). Product innovation by continually
improving product quality, introducing new products, developing new markets, and using new
technologies can encourage increased company performance (Mitrega et al., 2017). Studies
show that radical innovation also affect business performance (Kocak et al., 2017). Agility
has a strong relationship with radical product innovation, which has an impact on improving
business performance (Oliveira, 2017). Agility allows the work team to quickly create and
communicate decisions on developing new products (Rebentisch et al., 2018). Likewise,
organizational agility has a strong inuence on company performance (Ravichandran, 2018).
The better innovation capability (new product, process, management and marketing) under-
taken by small and medium enterprises will make the better company performance (Sulistyo
& Siyamtinah, 2016). Agility will be able to improve market performance when decision
makers have market skills, experience, and learning orientation (Nemkova, 2017). Therefore,
product innovation agility based on market needs allows an increase in business performance.
H5: Product innovation agility signicantly affects business performance
The mediation role of product innovation agility
Agility is an approach to manage and provide a fast and reconguring system to deal with
rapid environmental changes (Bernardes & Hanna, 2009). Organizational culture in customer
orientation by understanding customer expectations and feedback can drive the organization’s
speed and agility to innovate new products. Furthermore, learning orientation enhances
experience and knowledge and increases the agility of new product innovations (Elkareem
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et al., 2011) and organizational agility will determine the quality of the decisions that are
determined (Kock & Gem, 2016). Agility allows the work team to take decisions quickly on
developing new products and the efciency of the completion of new products (Rebentisch et
al., 2018). The higher the agility, the faster the radical product innovation and it will impact
on improving business performance (Oliveira, 2017).
Agility needs the support of all parties to create better changes so that continuous learning
orientation is needed (Holbeche, 2018). Agility will be able to improve market performance
when decision makers have marketable skills, experience, learning orientation (Nemkova,
2017). Furthermore, when the organization has agility, it will encourage the increased of
market performance. According to Tajeddini (2016), organizations that are open to nd new
ideas, products and process innovation with new technologies, can improve business perfor-
mance. Dynamic environmental changes determine the adaptive agility so that it affects the
company’s performance. Therefore, the company’s speed in meeting product needs that is
suitable for customer expectation requires product innovation agility, so that it will impact on
business performance. Besides that, learning orientation that is directed to gain new product
knowledge that is suitable with customer expectations will encourage product innovation
agility, thus it also impacts business performance.
H6: Product innovation agility mediates the relationship between market orientation and
business performance.
H7: Product innovation agility mediates the relationship between learning orientation
and business performance.
Methodology
Research Framework
The object of this research is the fashion creative industries in Central Java, Indonesia. This
research was conducted on since February to April 2018. The analysis unit of this research is
the managers or owners of the creative industry. The researchers consider that the managers
or owners have experiences in managing business and have outlook and ethics in the impor-
tance of market orientation, learning orientation, and also product innovation agility which
becomes an effort to improve higher business performance.
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Variable denition and measurement
To test the proposed hypothesis, a questionnaire that has good validity content is needed.
The questionnaire built will be used to test market orientation, learning orientation, product
innovation agility, and business performance. Primary data and secondary data were used in
this study. Primary data is obtained through questionnaires and face-to-face interviews. Pri-
mary data which is obtained through questionnaires will be tested for validity and reliability
to ensure good validity and consistency of all instruments. The distribution of questionnaires
was carried out to get responses from creative industry owners or managers from 5 districts/
cities in Central Java.
Furthermore, face-to-face interviews with managers or owners are also carried out to
check the accuracy of information, validate results and develop an understanding of the ques-
tionnaire. In-depth interviews and questionnaires collected will be used to measure market
orientation, learning orientation, product innovation agility, and business performance. All
constructs of 5-point Likert scale is ranked from “strongly disagree” (1) to “strongly agree”
(5). Operational denition of each variables are as follows:
Market Orientation. Market orientation is an organizational culture that has condence
and values that put customers in the center of business decisions, and measured through 9
indicators adopted from (Asikhia, 2014), they are: value added for consumers, understanding
consumer needs, customer satisfaction, information sharing competitors, competitor action
responses, competitor strategy responses, inter functional coordination, information sharing
among parts, and cooperation formulate strategies.
Product Innovation Agility. Product innovation agility is the ability of an organization to
innovate products effectively and efciently to respond the environmental changes, which is
measured by 4 indicators adopted from (Elkareem et al., 2011), they are: products based on
customer needs, develop and market products exibly, develop products based on customer
tastes, ability to change products on demand.
Learning Orientation. Learning orientation is the company ability to improve employees’
capability and build their condence to adapt with the market environment changes which is
measured by 4 indicators developed by (Suliyanto and Rahab, 2012), they are: improve the
ability of marketing employees, improve the skills of marketing employees, develop trust
among marketing employees, think the market environment changes.
Business Performance. Business performance is the ability to dominate the market and
focus on its goal marketing and nancial. It is measured by 4 indicators adopted from (Win-
gwon, 2012; Karacaoglu et al. 2013), they are: return on assets, prot growth, sales growth,
market share growth.
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Research sample
Data collection through face-to-face interviews and questionnaires was conducted. This
study uses market orientation variables, learning orientation, product innovation agility, and
business performance. Respondents selected were 376 managers or creative industry owners
in Central Java, Indonesia. Questionnaires collected and lled as much as 265 of the total
respondents. The total of unlled questionnaires was 44 respondents, so the data processed
was 221 respondents. During the data processing, there are still 16 data that are extreme and
inappropriate to use. The total sample of this study was 205 respondents or 54.5% of the total
respondents. Data is collected from 5 districts/cities representing creative industry owners or
managers in Central Java, Indonesia.
Data analysis and measurement model
The SEM approach has been used to process the data in order to test the hypotheses. SEM is
used to examine the relationship between market orientation, learning orientation, product
innovation agility, and business performance. Data analysis using SEM consists of two types
of variables, namely latent variables and observed/manifest. The latent variable cannot be
observed directly but it is observed through an indicator that is reected in the construct that
is developed when the observed variable can be observed directly. Model match evaluation
with Conrmatory Factor Analysis is in table 1.
In table 1, all constructs have good reliability, this shows there is internal consistency. It
means that the construct latent can be measured consistently through all indicators (Hair et
al, 2010). Reliability (CR) is more than 0.6, Variance Extracted (VE) is more than 0.5, and
this is in accordance with the internal consistency standard of the measured indicator. Table
2 shows CR value is more than 0.7, VE is more than 0.7, for market orientation, learning
orientation, product innovation agility, and business performance.
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Table 2
Construct Reliability, Correlation and AVE
N = 205 1 2 3 4
Market Orientation 0.932
Learning Orientation
0.625
0.893
Product Innovation Agility 0.567 0.504 0.913
Business Performance 0.685 0.643 0.675 0.851
AVERAGE Variance Extracted (AVE) 0.607 0.719 0.726 0.589
Source: data was calculated by SEM
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Results
The results of the initial structural model test before there is a mediating variable, it indicates
a good Goodness-of-Fit index. The value of X2 = 207,944 is not signicant at α 0.05, the
GFI index is 0.91; AGFI 0.89; TLI 0.99; CFI 0.99; RMSEA 0.02 <0.08 and CMIN / DF 1.13
<2.00, all values are in accordance with the criteria recommended by SEM.
Table 3 and Figure 1 show the direct effect of MO on BP (Std β = 0.314, CR = 3.816, p
<0.01); LO to BP (Std b = 0.262, CR = 3.312, P <0.01) and PIA to BP (Std b = 0.374, CR =
4.982, P <0.01). It can be concluded that MO, LO and PIA partially have a signicant effect
on BP.
Table 3
Direct effect of MO, LO, PIA on BP
Effect Std β SE β C.R.
MO -> BP .314 .086 3.816*
LO -> BP .262 .092 3.312*
PIA ->BP .374 .073 4.982*
Note: * < 0.01
Source: data was calculated by SEM
Figure 1. Initial structural model
Source: data was calculated by SEM
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The results of the nal structural model after there is mediating variables show a
good Goodness-of-Fit index and are in accordance with the criteria recommended by SEM.
The value of X2 = 211.278 shows no signicant at α 0.05, GFI index 0.94; AGFI 0.89; TLI
0.98; CFI 0.98, so all values ≥ 0.90 except AGFI 0.89. Furthermore, RMSEA .029 is smaller
than 0.08 and CMIN / DF 1,174 is smaller than 2,00, so that all values are in accordance with
the recommended SEM. Therefore, the ts or proper model is used to test the relationship
among variables in this study.
Table 4
Parameter estimation of the path: direct and indirect effects
Effect Std β SE β C.R.
H1 : MO ->PIA .540 .118 4.558*
H2 : LO-> PIA .265 .094 2.831*
H3 : MO -> BP .398 .107 3.709*
H4 : LO -> BP .277 .083 3.350*
H5 : PIA -> BP .355 .072 4.925*
H6 : MO -> PIA -> BP .191 .000 3.354*
H7 : LO -> PIA -> BP .094 .007 2.447*
Note: * p < 0.01
Source: data was calculated by SEM
Table 4 and Figure 2 show a signicant positive direct effect between MO and PIA (Std β
= .540, CR = 4.558, p <0.01), between LO and PIA (Std β = .265, CR = 2.831, p <0.01),
between LO and BP (Std β = .398, CR = 3.709, p <0.01), between PIA and BP (Std β = .227,
CR = 3.335, P <0.01), between PIA and BP (Std β = .355 , CR = 4.925, P <0.01). This result
is indicated that H1, H2, H3, H4, H5 are accepted.
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Figure 2. Final structural model
Source: data was calculated by SEM
PIA test becomes a mediating variable between MO and BP, the Sobel test approach
(1982) is used. The result of the Sobel test is shown 3,354 (p <0.01), PIA is able to mediate
the relationship between MO and BP, so H6 is accepted. The total indirect effect is 0.895
(0.540 + 0.355) greater than the direct effect of 0.398, so PIA has an important role in par-
tially mediating the relationship between MO and BP. Furthermore, the result of the PIA test
as a mediating variable between LO and BP indicated the Sobel test of 2,447 (P <0.01), PIA
was able to mediate the relationship between LO and BP so that H7 was accepted. The total
indirect effect is 0.620 (0.265 + 0.355) greater than the direct effect of 0.227, so PIA has an
important role in partially mediating the relationship between LO and BP. Thus, PIA has a
big role in mediating the relationship between MO and LO on BP.
Discussion
Market orientation signicantly affects product innovation agility. The culture to understand
the needs and desires of customers encourage creative industry to learn so that it has effect
on product innovation agility. The strong organizational culture to have condence and value
that puts customers in every business decision will encourage creative industry players to
develop product innovation agility based on customer expectations. The market orientation
which becomes a business decision is realized in the form of value added for the consumer,
understanding the needs of the consumers, providing satisfaction for the consumer, sharing
of competitor information, the fast response of the competitors’ actions and the competitor’s
strategy, coordinating among internal functions, always sharing information among teams
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and building cooperation to formulate the strategies. The ability of companies to understand
customers, competitors, and inter-functional coordination will encourage companies to deve-
lop products according to customer needs and be exible in production according to market
demand. Market orientation also encourages companies to always adapt to customer needs
and be exible to develop unique products and different from competitors. The results of this
study support the previous research which states that customer orientation by understanding
customer expectations and feedback can drive the organization’s speed and agility to innovate
new products (Elkareem et al., 2011). Similarly, agility becomes as a key to develop new
products to be able to meet market needs (Schuh et al., 2017)these processes pursue the target
of limiting both time-to-market and resources associated with the realisation of innovative
products. In the case of physical products, agile development in the form of highly iterative
prototyping is further rmore employed for assuring a stable ramp-up phase. The goal of this
paper is the creation of an adaptive engineering change management (ECM.
Learning orientation signicantly affects product innovation agility. Learning orientation
that is directed at strengthening employee skills to develop unique and different products re-
quires agility to innovate products according to customer needs. Likewise, high trust among
employees to always think a change will drive the speed of product innovation according
to market needs. The results of the study are in accordance with the opinion that learning
orientation improves innovation capabilities that can be implemented in the form of ideas,
processes, products and services (Day, 1994), and learning orientation can improve compa-
ny’s innovativeness (Mahmoud, 2016). The commitment to learn the importance of market
orientation is necessary for the organization to develop the product innovation agility. The
result of this study supports the previous research conducted by (Elkareem et al., 2011), it is
stated that learning orientation can enhance experience and knowledge to increase the agility
of new product innovations.
Market orientation signicantly affects business performance. This result study is in line
with the ndings of the previous research which states that market orientation can improve
business performance (Nikraftar & Momeni, 2017; Ho et al., 2018; Masa’deh et al., 2018tech-
nology orientation entrepreneurial orientation; Bhattarai et al., 2019; Musa et al., 2019).
Creative industry players should consider every business decision to be market-oriented. The
policy is taken in the form of consumer orientation in the form of value-added for consumers,
understanding the needs of consumers, providing satisfaction for consumers. Furthermore,
competitor-oriented should also be considered in the form of competitor information sharing,
quick response of competitors’ actions and competitor strategies, as well as inter functional
coordination (inter-functional coordination, sharing information among teams and formulating
cooperation strategies).
M. Mulyana, et al. / Contaduría y Administración 65(4) 2020, 1-23
http://dx.doi.org/10.22201/fca.24488410e.2020.2367
17
Product innovation agility signicantly affects business performance. The ability of com-
panies to develop products according to their needs and provide more value for customers
will expand market share. In addition, the company also has the ability to regulate the amount
of production according to market demand so as to create cost efciency and have an impact
on increasing company prots. This ndings support the assertion that agility will be able to
improve market performance when decision makers have market skills, experience, learning
orientation (Nemkova, 2017), and product innovation capability will be able to improve
company’s performance (Sulistyo & Siyamtinah, 2016). Likewise, organizational agility
has a strong inuence on company performance (Ravichandran, 2018). The capabilities of
innovation taken by creative industry actors are outlined in the form of introduction of new
products, application of new technology products, product differentiation, market entry with
new products, which can boost both sales and prot and increase return on assets. The result
of this study support the nding of the better product design can increase sales growth, as
conducted by (Dirisu, 2013).
Learning orientation signicantly affects business performance. The result support the
previous nding that states that learning orientation with a strong commitment lead to achieve
the vision and goals as well as improve business performance (Martinette, 2006). Learning
orientation can improve business performance (Aloulou, 2018). The commitment to learn
importance of market orientation is necessary for the organization to gain insight about the
market, customers, and competitors. Business decision can be described in the increased em-
ployees’ skill, developing trust among employees and always thinking about the changes in
the face of competition. The result of this study also indicates that market learning orientation
play a mediator role between market orientation and business performance. The culture to
understand the needs and desires of customers encourage creative industry players to learn
so that it has an effect on business performance.
Conclusion
The result shows the importance of market orientation to improve the creative industry per-
formance in Indonesia. The organizational culture has the condence and value that puts cus-
tomers on every business decision. It encourages the creative industry to improve the product
innovation agility based on the customers’ expectation. Learning based on market-oriented is
essential to enhance the organizational ability in order to gain market knowledge, customers
and competitors. Decision making in market-oriented business leads the product innovation
agility and learning orientation and enhance the performance of creative industry.
M. Mulyana, et al. / Contaduría y Administración 65(4) 2020, 1-23
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18
In managerial implication, the performance of the creative industry can be improved
through marketing programs that is market-oriented. Market-oriented in marketing policy
can be done by knowing the customer orientation, competitor orientation and inter functional
coordination in accordance with environmental dynamics. Creativity is needed by the creative
industry to improve product innovation agility according to market requirement. Improving the
commitment to learn can gain knowledge of markets, customers and competitors. The theore-
tical implication of this research is that the performance of creative industry can be improved
by developing market-oriented program, product innovation agility and learning orientation
simultaneously. The role of market orientation and learning orientation in improving business
performance will be more effective if it is done indirectly through product innovation agility.
Limitation and Future Research
The nding of this study is expected to contribute in the development of science, especially
management science. The limitation of this research focuses only on the creative industry of
fashion sector with a relatively small sample size and does not separate the scale of micro,
small and medium enterprises. Leaders or managers of creative industries have different
abilities in developing their business. They also have different views and behaviors towards
the willingness to learn and understand market changes. Future research can be applied to
the business sector with a larger scale and wider geographical area.
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