Integrating Learning and Strategy to Enhance SME Performance in Indonesia
Abstract
This study examines the integration of learning orientation and business strategy in driving the entrepreneurial orientation — specifically innovativeness, proactiveness, and risk-taking — of small and medium-sized enterprises (SMEs) in Indonesia. Grounded in the Resource-Based View (RBV) theory, this research addresses a key gap by investigating how learning and strategy mediate the relationship between entrepreneurial behaviors and firm performance. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) and a survey of 300 SME entrepreneurs, the study finds that learning orientation and business strategy significantly influence firm performance, collectively explaining 51.3 % of the variance. The results demonstrate the pivotal role of innovation, proactive behaviors, and risk-taking in enhancing SME competitiveness and growth. Furthermore, the study highlights the importance of continuous learning and strategic adaptability in helping SMEs navigate Indonesia's dynamic market environment. These findings provide new theoretical insights into the mechanisms driving firm performance and offer practical implications for SME managers and policymakers aiming to foster entrepreneurial growth in emerging economies. This research contributes to the literature by exploring the unique interplay between learning, strategy, and entrepreneurship within the Indonesian context.