Effect of Market Orientation on Firm Performance the Mediating Role of Entrepreneurial Orientation: The Case of Small and Medium Sized Enterprise (SMEs) in Ethiopia

Abstract

Market orientation is the line with increasing a global market competition of an organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and EO that indicated the prime motives behind these changes are digitization and the dynamic turbulent business environment of firms. The study aimed to examine the effect of strategic innovation on the performance of SMEs in selected Oromia regional state in Finfinne Zuria and East Shewa, Ethiopia. The target population of the study was 19,709 SMEs of firms in Bole Lemi IP cluster, number respondents provided from Sheger zuria Oromia, Ethiopia SMEs data during collected 2024. Data were drawn and collected from a sample of 390 from textile and manufacturing industry, using the quantitative, a cross-sectional and primary data collected from Textile and Apparel manufacturing industry, in Oromia Regional state selected from Bole Lemi IP cluster, located From Sheger Zuria. The study was adopted descriptive study of study the mean used to measure to located for distribution of response and dispersion of the respondents to a particular questions will be explained, CFA to testing the model which are individual, measurement and to construct SEM as the main aspect for the relationships amongst latent variables, and other indicators was designed to analysis and to evaluate the effect of Market Orientation with firm performance in SMEs that Mediated with Entrepreneurial Orientation. the standardized regression results estimate shows the direct effect of Market Orientation with performance has positively influenced with firm performance in SMEs, the direct effect of Entrepreneurial Orientation with performance has a negative effect with firm performance in SMEs, the direct effect of Market Orientation with Entrepreneurial Orientation has positively influenced in SMEs and the indirect mediation effect of Entrepreneurial Orientation between Market Orientation and Firm performance in SMEs has positively influenced Oromia regional Sate Sheger Zuria SMEs hat Alignment, Human Capital, customer insights and Tec. Capabilities has positively influenced with firm performance in SMEs in Bole Lami IP Cluster of textile and apparel manufacturing industry in the study area, respectively.