The role of strategic planning and flexibility in shaping SMEs market orientation in turbulence business environment

Abstract

This study aims to investigate the impact of environmental turbulence, strategic planning and strategic flexibility toward market orientation. One hundred and eighty-six managers of Small and Medium Enterprises in Malang City, Indonesia were surveyed by using purposive sampling technique. Data was analysed by using Partial Least Squares. Internal environment has positive significant effects on both strategic planning and strategic flexibility. This study also found a significant effect of external environment on strategic flexibility and strategic planning. The study determined that strategic planning played an important role in mediating the effect of business performance on market orientation. The model is considered a comprehensive model because it was not only analysing important constructs namely external and internal environment, strategic planning and strategic flexibility, but also tested the interrelationships among these constructs in predicting market orientation. The study also provides empirical evident about the mediation role of strategic planning on the effect of external environment on market orientation and also on the mediating role of strategic planning on the relationship between internal environment on market orientation.