Market Orientation, Innovation and Its Impact on Environmental Sustainability Practices: Evidence from Indonesian Palm Oil Companies

R N Sari(1), D Junita(2), R Anugerah(3), Yusralaini(4)
  • (1) Department of Accounting, Faculty of Economics and Business, Universitas Riau, Pekanbaru, Indonesia
  • (2) Department of Accounting, Faculty of Economics and Business, Universitas Riau, Pekanbaru, Indonesia
  • (3) Department of Accounting, Faculty of Economics and Business, Universitas Riau, Pekanbaru, Indonesia
  • (4) Department of Accounting, Faculty of Economics and Business, Universitas Riau, Pekanbaru, Indonesia

Abstract

This study aims to examine the effect of market orientation on innovation and then its impact on environmental sustainability practices. Data was obtained through questionnaires distributed to 178 respondents who were the top and middle managers of the palm company. Data then analyzed by SEM-PLS analysis techniques through WarpPLS 5.0. Results showed that market orientation has a significant effect on innovation and environmental sustainability practices. Further analysis found that innovation mediates the relationship between market orientation and environmental sustainability practices. This study suggests that environmental sustainability practices are important to ensure the sustainability of Palm Oil Company.

Keywords

Market orientation, innovation, environmental sustainability practices, palm company, Indonesia

References

  • Han, H., Hsu, L.T. and Lee, J.S. Empirical investigation of the roles of attitudes toward green behaviors, overall image, gender, and age in hotel customers’ eco-friendly decision-making process. International Journal of Hospitality Management, 28(4)(2009) pp. 519-528.
  • Crittenden, V.L., Crittenden, W.F., Ferrell, L.K., Ferrell, O.C. and Pinney, C.C. Market-oriented sustainability: a conceptual framework and propositions. Journal of the Academy of Marketing Science, 39(1)(2011) pp. 71-85.
  • Slater, Stanley F., and John C. Narver. Market orientation and the learning organization. Journal of marketing 59.3 (1995) 63-74.
  • Kohli, Ajay K., and Bernard J. Jaworski. Market orientation: the construct, research propositions, and managerial implications. Journal of marketing 54(2) (1990) 1-18.
  • Wilburn Green, Kenneth, Lisa C. Toms, and James Clark. Impact of market orientation on environmental sustainability strategy. Management Research Review 38(20 (2015) 217-238.
  • Carmen, Camarero, and Garrido María José. The role of technological and organizational innovation in the relation between market orientation and performance in cultural organizations. European Journal of Innovation Management 11(3) (2008) 413-434.
  • Narver, John C., and Stanley F. Slater. The effect of a market orientation on business profitability. Journal of marketing 54(4) (1990) 20-35.
  • Jaworski, Bernard J., and Ajay K. Kohli. Market orientation: antecedents and consequences. Journal of marketing 57(3) (1993) 53-70.
  • Carr, Jon C., and Tará Burnthorne Lopez. Examining market orientation as both culture and conduct: modeling the relationships between market orientation and employee responses. Journal of Marketing Theory and Practice 15(2) (2007) 113-125.
  • Lafferty, Barbara A., and G. Tomas M. Hult. A synthesis of contemporary market orientation perspectives. European journal of marketing 35(1/2) (2001) 92-109.
  • Moldan, Bedřich, Svatava Janoušková, and Tomáš Hák. How to understand and measure environmental sustainability: Indicators and targets. Ecological Indicators 17 (2012) 4-13.
  • Holdren, John P., Gretchen C. Daily, and Paul R. Ehrlich. The meaning of sustainability: biogeophysical aspects. Defining and measuring sustainability: the biogeophysical foundations (1995) 3-17.
  • Damanpour, Fariborz. Innovation effectiveness, adoption and organizational performance. Innovation and creativity at work: Psychological and organizational strategies (1990) 125-141.
  • Damanpour, Fariborz, Richard M. Walker, and Claudia N. Avellaneda. Combinative effects of innovation types and organizational performance: A longitudinal study of service organizations. Journal of management studies 46(4) (2009) 650-675.
  • Bartlett, Dean. Embedding corporate responsibility: the development of a transformational model of organizational innovation. Corporate Governance: The international journal of business in society 9(4) (2009) 409-420.
  • Sinkula, J.M. Market information processing and organizational learning. Journal of Marketing, 58 (1) (1994) pp. 35-45.
  • Hurley, R. F., & Hult, G. T. M. Innovation, market orientation, and organizational learning: an integration and empirical examination. Journal of marketing 62(3) (1998) 42-54.
  • Low, David R., Ross L. Chapman, and Terry R. Sloan. Inter-relationships between innovation and market orientation in SMEs. Management Research News 30(12) (2007) 878-891.
  • Maydeu-Olivares, Albert, and Nora Lado. Market orientation and business economic performance: A mediated model. International Journal of Service Industry Management 14(3) (2003) 284-309.
  • Agarwal, S., Erramilli, K. and Dev, C. Market orientation and performance in service firms: role of innovation. Journal of Services Marketing 17(1) (2003) pp. 68-82.
  • Sen, Barbara. Defining market orientation for libraries. Library Management 27(4/5) (2006) 201-217
  • Huarng, Kun-Huang, and Tiffany Hui-Kuang Yu. Entrepreneurship, process innovation and value creation by a non-profit SME. Management Decision 49(2) (2011) 284-296.
  • Kusrini, Elisa, and Rangga Primadasa. Design of Key Performance Indicators (KPI) for Sustainable Supply Chain Management (SSCM) Palm Oil Industry in Indonesia. MATEC Web of Conferences (159) EDP Sciences (2018).
  • Ghozali, Imam & Latan. Structural equation modeling: alternative methods with partial least square (pls). (Universitas Diponegoro, Semarang, 2014).
  • F. Hair Jr, J., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. Partial least squares structural equation modeling (PLS-SEM) An emerging tool in business research. European Business Review 26(2) (2014) 106-121.
  • Pimenta, Handson CD, and Peter D. Ball. Analysis of environmental sustainability practices across upstream supply chain management. Procedia Cirp 26 (2015) 677-682.

DOI : https://doi.org/10.32698/GCS-PSSHERS378

Progress in Social Science, Humanities and Education Research Symposium

Progress in Social Science, Humanities and Education Research Symposium

Redwhite Press

2685-5984

2685-5933

2020

© 2024 GCI, Global Conferences Series, Lda - All rights reserved.

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.