The Effect of Organizational Capability, Market Orientation, and IT Adoption on Creative Industry Business Performance

Background: The creative industry, particularly the batik sector, is known to play an essential role in the development of Indonesia's national economy. Despite its inherent value, the sector has experienced a decline in business performance, primarily attributed to challenges in competing with...

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Bibliographic Details
Published in:Pacific Asia journal of the Association for Information Systems 2024-03, Vol.16 (1)
Main Authors: Hikmah, Hikmah, Andalan Tri Ratnawati, Darmanto, Susetyo
Format: Article
Language:English
Subjects:
Creative industries
Data collection
Financial performance
Industrial development
Information technology
Market orientation
Markets
Orientation
Quantitative analysis
Sampling
Structural equation modeling
Technology Acceptance Model
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Summary:Background: The creative industry, particularly the batik sector, is known to play an essential role in the development of Indonesia's national economy. Despite its inherent value, the sector has experienced a decline in business performance, primarily attributed to challenges in competing with foreign products. Therefore, this study aimed to analyze the effect of organizational capability, market orientation, and information technology (IT) adoption on business performance of the creative industry in Central Java, Indonesia.Methods: A quantitative method was used in this study, and the sample population comprised 200 batik businesses in Semarang, Surakarta, and Pekalongan Cities. Furthermore, data collection was carried out through questionnaires and Google Forms with purposive sampling. The selected data were then analyzed using the Partial Least Square Structural Equation Model (PLS-SEM).Results: The results showed that organizational capability, market orientation, and IT adoption had a significant effect on business performance. Furthermore, IT adoption was identified as a dominant factor in increasing the performance of the creative industry.Conclusion:The results obtained contributed to enriching the development of the resource-based view (RBV) and technology acceptance model (TAM) theories. Some practical implications were also proposed, which allowed the creative industry to develop business by considering the results obtained.
ISSN:1943-7536
1943-7544
DOI:10.17705/1pais.16106