Does Engaging in Global Market Orientation Strategy Affect HEIs’ Performance? The Mediating Roles of Intellectual Capital Readiness and Open Innovation

Abstract

This study aims to examine the effect of global market orientation strategy on the performance of Indonesian Higher Education Institutions. Furthermore, it investigates whether this relationship is mediated by intellectual capital readiness and open innovation. This is a quantitative study employing a multi-mediation research model conceptualizing the relationship among the five constructs. This study employs a resource-based view to explain the relationships among constructs and partial least squares-structural equation modeling to test the hypotheses studied. A sample of 119 schools/faculties, derived from the 50 best state and private institutions in Indonesia and based on the Webometrics 2021, was used. This research reveals the following main results. First, intellectual capital readiness fully mediates the influence of global market orientation strategy on the institutions’ performances. Second, open innovation does not mediate the effect of global market orientation strategy on institutions’ performances. This study is the first attempt to understand how global market orientation strategy enhances institutions’ performances via intellectual capital readiness and open innovation. This study reveals the insignificant effect of open innovation on performance. Thus, the main implication of these findings is that institutions need to downstream their innovations to the community for future performance and communities’ benefits. The applied execution does matter in the open innovation–institution performance relationship.

Relational capital and strategic orientations as antecedents of innovation: evidence from Mexican SMEs

“…Previous research examined the relationship between innovation and business performance (e.g., Hult et al, 2004;Olavarrieta & Friedmann, 2008;Rhee et al, 2010;Trachuk & Linder, 2022) or as a mediating variable (Tjahjadi et al, 2022). In a meta-analysis, Bowen et al (2010) found that the temporal sequencing of research designs is flawed in previous empirical studies of the causal directions of organizational performance and the innovation relationship.…”

Obtaining Sustainable Competitive Advantage Through Reputation Management: A Case of Private Universities in Indonesia

“…As a result, the number of universities worldwide has surged from 2006 to 2018 and the global student population has also grown, however, the contrary is seen for private universities, where there has been a decline, especially in south-east Asia. In the field of management science, the trend of declining university numbers suggests that there are universities that have closed due to various factors such as competition failure, lower profitability compared to other universities, inadequate managerial ability, and lower quality of academic service products than other universities [3].…”

The Perceived Effect of Intellectual Capital on the Performance of a Higher Education Institution: A Case Study

“…However, on the one hand, the quality of education depends highly on the organisation's resources (namely intangibles) to create IC. On the other hand, if the organisation does not have the proper resources to create IC, it will negatively impact its performance, namely regarding organisational innovations and competitiveness (Tjahjadi, 2022). Therefore, in this paper, IC is defined as a "dynamic system of intangible elements whose effective management is essential to enhance value creation in universities" (Ramírez et al, 2013, p. 27).…”

“…These institutions play a key role in developing a knowledge-oriented society, using intangible resources as input to produce knowledge (Shehzad et al, 2014). Therefore, IC is one of the most important strategic resources for improving organisational performance (Tjahjadi, 2022).…”

“…However, research on the interrelationship between IC and performance is still scarce in the context of HEIs pertaining to emerging countries, something which is missing in the literature, and can allow cross-country analyses. Assessing this interrelationship in such institutions is highly important since the better the management of their internal resources (namely intangible ones), the better their performance will be (Tjahjadi, 2022). Also, managers tend to assess performance based on financial indicators, something which has been considered insufficient (see Zuñiga-Collazos et al, 2020).…”