Effect of market orientation on performance of small and medium enterprises; mediating role of innovation.

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Date
NOVEMBER, 2016
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Abstract
The Small and Medium Enterprises sector in Ghana has been seen as the engine of growth to the economy as a result of its ability to create job, generate revenue, reduce poverty and drive economic growth. Performance of the Small and Medium Enterprises sector to a large extent depend on the drive towards market oriented behaviour and development of innovative practices. The study focused on assessing the effect of market orientation on performance of Small and Medium Enterprises, the mediating role of innovation. The study was necessitated because of the challenge of Small and Medium Enterprises inability to exploit market orientation strategies and bring some level of innovativeness to their operations. The study was conducted on a total of 500 Small and Medium Enterprises within the Kumasi metropolis out of which 391 responses were received representing 78.2% response rate. Purposive and convenience sampling techniques were adopted in selecting Small and Medium Enterprises and questionnaires used to collect data. The study used Structural Equation Model for data analysis. Market orientation variables of customer orientation, competitor orientation, generation of information, dissemination of information as well as implemented response impacted positively on performance. Inter-functional orientation as market orientation variable however impacted negatively on performance. Market orientation impacted positively on innovation and innovation as well positively impacted on performance. Innovation partially mediates between customer orientation and performance. Innovation fully mediate between inter-function orientations, generation of information as well implemented response and performance. Innovation has no mediation between competitor orientation as well as dissemination of information and performance. The study recommended that Small and Medium Enterprises should embark on market orientation practices and innovate so as to maximise performance.
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A thesis Submitted to the Department of Marketing and Corporate Strategy, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Masters of Philosophy Business Administration (Marketing option),
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