Innovation ability in mediates on the relationship of entrepreneurship orientation, organizational culture and knowledge management on MSME performance

Abstract

This study aims to examine the effect of organizational culture, knowledge management, and entrepreneurial orientation according to the performance of MSMEs; mediated by innovation capabilities. The sample in the study was 265 food and beverage MSMEs in Malang City, East Java Province. The analysis tool used in this study is Structural Equation Modeling (SEM). The results of the study explain entrepreneurial orientation, organizational culture, knowledge management that influence the innovation ability and the performance of food and beverage MSMEs. The ability of innovation affects the performance of MSMEs. The impact of entrepreneurial orientation, organisational culture, and knowledge management on MSME performance can be moderated by an organization's capacity for innovation. The implications of the results of this study for the development of the Resource Base View theory, that the performance of food and beverage MSMEs in Malang City will increase if MSME actors make maximum use of intangible resources through entrepreneurial orientation as shown by being proactive, carrying out an organizational culture such as consistency and using management. Good knowledge is shown by the ability of MSME actors to utilize knowledge, this condition increases innovation capabilities, especially product innovation and has an impact on improving MSME performance through product performance.