Encourage small business environmental sustainability performance by market orientation and environmental innovation

Abstract

This paper examines whether simultaneous market orientation and environmental innovation may drive organizations’ environmental sustainability performance, with environmental innovation as a mediation. Market orientation, innovation, and performance: the relationship between the three constructs has been shown in several previous investigations, but not many results have been obtained about how it impacts the environment. We study market orientation relationships as separate variables, namely customer orientation, competitor orientation, and interfunctional coordination. The examination every market orientation component that affects organizational environmental innovation on how to change environmental sustainability performance. The method used to analyze data is modeling the structural equations of cross-sectional survey data with the SMART-PLS software, using 300 manufacture small businesses located in Indonesia. We empirically test and substantiate that not all components of market orientation have a significantly positive effect on environmental sustainability performance, but environmental innovation is an excellent mediator. Our findings show that small businesses can improve their market orientation capabilities and innovate in overcoming the challenges of environmental damage in the future, even with limited resources.

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