The Implication of Business Digitalization, Organizational Learning, and Innovation Capabilities on the Firm Performance of MSMEs
DOI:
https://doi.org/10.30587/jurnalmanajerial.v11i02.6293Keywords:
Digitalization, Besiness, Organizational, Learning, Innovation, PerformanceAbstract
Background – In recent years, more businesses have been adopting digital technologies to streamline processes, enhance customer experiences, and stay competitive. The COVID-19 pandemic has accelerated this digital transformation, creating opportunities and challenges for MSMEs in Bandung, Indonesia. As MSMEs contribute significantly to employment and economic growth, they face obstacles in adapting to changing conditions in the technological and disrupted market landscape.
Aim – This study examines the implications of Business Digitalization, Organizational Learning, and Innovation Capabilities on the Firm Performance of micro in Small, and Medium Enterprises (MSMEs).
Design/ Methodology/ Approach – This research study was conducted in the City of Bandung, Indonesia, and collected survey data from 129 MSMEs that have undergone digital transformation. Non-probability sampling was employed in the study. The relationship between business digitalization, organizational learning, innovation capabilities, and firm performance was analyzed using SPSS software through multiple regression analysis.
Findings – The findings reveal that business digitalization significantly enhances firm performance by facilitating knowledge creation, collaboration, and operational efficiency for MSMEs. Organizational learning has a considerable positive influence on firm performance, improving decision-making, promoting innovation, and enabling successful adaptation. Similarly, innovation capabilities positively influence firm performance by driving the development of new products, cost-cutting measures, and differentiation.
Conclusion - MSMEs in developing their businesses are advised to use digital bases and develop innovative innovations
Research implication – this research contributes to the field of management studies by shedding light on the interconnectedness of business digitalization, organizational learning, innovation capabilities, and firm performance in the context of MSMEs. The findings provide actionable insights that can guide MSMEs towards improved strategies for success in a rapidly evolving business landscape
Limitations – This study focuses on MSMEs that have digitized their business and have undertaken organizational learning and innovation capabilities. From the time of the pandemic 2019 until 2023, without excluding other potential factors that may affect firm performance among MSMEs, such as market competition and external environmental factors.
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Hooi, L. W. (2019). Firm performance: Is organizational learning capability the magic wand? International Journal of Productivity and Performance Management, 68(8), 1411–1433. https://doi.org/10.1108/IJPPM-01-2019-0023
Horng, J.-S., Liu, C.-H., Chou, S.-F., Yu, T.-Y., Hu, D.-C. (2022). Role of big data capabilities in enhancing competitive advantage and performance in the hospitality sector: Knowledge-based dynamic capabilities view. Journal of Hospitality and Tourism Management, 51, 22–38. https://doi.org/10.1016/j.jhtm.2022.02.026
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Isobe, T., Makino, S., & Montgomery, D. B. (2004). Exploitation, Exploration, and Firm Performance: The Case of Small Manufacturing Firms in Japan. Research Collection Lee Kong Chian School Of Business.
Jerez-Gómez, P., Céspedes-Lorente, J., & Valle-Cabrera, R. (2005). Organizational learning capability: A proposal of measurement. Journal of Business Research, 58(6), 715–725. https://doi.org/10.1016/j.jbusres.2003.11.002
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Kianpour, M., Kowalski, S. J., & Øverby, H. (2021). Systematically understanding cybersecurity economics: A survey. Sustainability, 13(24), 13677. https://doi.org/10.3390/su132413677
Kuang, Y., Fan, M., Fan, Y., Jiang, Y., & Bin, J. (2023). Digitalization, financing constraints and firm performance. Frontiers in Environmental Science, 11. https://www.frontiersin.org/articles/10.3389/fenvs.2023.1090537
Kusa, R., Duda, J., & Suder, M. (2021). Explaining SME performance with fsQCA: The role of entrepreneurial orientation, entrepreneur motivation, and opportunity perception. Journal of Innovation & Knowledge, 6(4), 234–245. https://doi.org/10.1016/j.jik.2021.06.001
Li, L., Ye, F., Zhan, Y., Kumar, A., Schiavone, F., & Li, Y. (2022). Unravelling the performance puzzle of digitalization: Evidence from manufacturing firms. Journal of Business Research, 149, 54–64. https://doi.org/10.1016/j.jbusres.2022.04.071
Li, Z., Liao, G., & Albitar, K. (2020). Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation. Business Strategy and the Environment, 29(3), 1045–1055. https://doi.org/10.1002/bse.2416
Levallet, N., & Chan, Y. (2018). Role of digital capabilities in unleashing the power of managerial improvisation. MIS Quarterly Executive, 17(1). https://aisel.aisnet.org/misqe/vol17/iss1/3.
Loebbecke, C., & Picot, A. (2015). Reflections on societal and business model transformation arising from digitization and big data analytics: A research agenda. Journal of Strategic Information Systems, 24(3), 149-157. https://doi.org/10.1016/j.jsis.2015.08.002.
Lyon, D. W., & Ferrier, W. J. (2002). Enhancing performance with product-market innovation: The influence of the top management team. Journal of Managerial Issues, 14(4), 452–469. https://www.jstor.org/stable/40604404
Martínez-Caro, E., Cegarra-Navarro, J. G., & Alfonso-Ruiz, F. J. (2020). Digital technologies and firm performance: The role of digital organisational culture. Technological Forecasting and Social Change, 154, 119962. https://doi.org/10.1016/j.techfore.2020.119962.
Meskhi, B., Bondarenko, V., Efremenko, I., Romanishina, T., Rudoy, D., & Olshevskaya, A. (2020). Impact of globalization and digitalization on the efficiency of environmental development of territories. E3S Web of Conferences. https://doi.org/10.1051/e3sconf/202021706012
Mikalef, P., Pappas, I. O., Krogstie, J., & Giannakos, M. (2018). Big data analytics capabilities: A systematic literature review and research agenda. Information Systems and E-Business Management, 16(3), 547–578. https://doi.org/10.1007/s10257-017-0362-y
Mohammad, H. I. (2019). Mediating effect of organizational learning and moderating role of environmental dynamism on the relationship between strategic change and firm performance. Journal of Strategy and Management, 12(2), 275–297. https://doi.org/10.1108/JSMA-07-2018-0064
Oliva, R., & Kallenberg, R. (2003). Managing the transition from products to services. International Journal of Service Industry Management, 14(2), 160–172. https://doi.org/10.1108/09564230310474138
Oloveze, A. O., Ugwu, P. A., Okonkwo, R. V. O., Okeke, V. C., Chukwuoyims, K., & Ahaiwe, E. O. (2022). Factors motivating end-users’ behavioural intention to recommend m-health innovation: Multi-group analysis. Health Economics and Management Review, 3(3), 17–31. https://doi.org/10.21272/hem.2022.3-02
O’Reilly, C. A., & Tushman, M. L. (2008). Ambidexterity as a dynamic capability: Resolving the innovator’s dilemma. Research in Organizational Behavior, 28, 185–206. https://doi.org/10.1016/j.riob.2008.06.002
Parker, G., Van Alstyne, M., & Jiang, X. (2017). Platform ecosystems: How developers invert the firm. MIS Quarterly, 41(1), 255–266. https://www.jstor.org/stable/26629646
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Published
2024-05-31
How to Cite
Ningsih, A., Priscilla, L., & Kaltum, U. (2024). The Implication of Business Digitalization, Organizational Learning, and Innovation Capabilities on the Firm Performance of MSMEs. Jurnal Manajerial, 11(02), 317–333. https://doi.org/10.30587/jurnalmanajerial.v11i02.6293
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P-ISSN: 2354-8592 __ E-ISSN: 2621-5055 
