Fuelling Success : How Learning – Driven Innovation Supercharges SMEs’ Performance
DOI:
https://doi.org/10.17010/pijom/2025/v18i10/174989Keywords:
learning-orientation, small and medium enterprises, innovativeness, business performance, strategy.JEL Classification Codes : D83, L25, L26, O31
Publication Chronology: Paper Submission Date : October 25, 2024 ; Paper sent back for Revision : July 29, 2025 ; Paper Acceptance Date : September 15, 2025 ; Paper Published Online : October 15, 2025
Abstract
Purpose : The present study examined the impact of learning orientation on the performance outcomes of small- and medium-sized enterprises (SMEs), focusing on innovativeness as a mediating factor.
Methodology : A structured questionnaire was used to collect data from 413 SMEs in Punjab, India, on learning orientation, innovativeness, and business performance. Structural equation modeling was applied to test the hypotheses.
Findings : The study revealed a positive relationship between learning orientation and business performance in SMEs. Additionally, innovativeness has been identified as a significant mediator in this relationship, highlighting that learning orientation fosters innovative practices that, in turn, improve business performance.
Practical Implications : This study provided valuable guidance for management practitioners and academicians. The study revealed how learning orientation impacted business performance through innovativeness.
Originality : The study offered a perspective on how SMEs could strategically use learning orientation to improve their overall performance and capacity for innovation.
Downloads
Published
How to Cite
Issue
Section
References
1) Aaijaz, N., Bin Ibrahim, D., & Ahmad, G. (2012). From learners to entrepreneurs: A study on the inclination of university students towards entrepreneurship as a career option and the role of education. Prabandhan: Indian Journal of Management, 5(9), 4–18. https://doi.org/10.17010/pijom/2012/v5i9/60249
2) Achar, A. (2013). Evaluation of training and development practices in SMEs: An empirical study. Prabandhan: Indian Journal of Management, 6(4), 19–30. https://doi.org/10.17010/pijom/2013/v6i4/59988
3) Alerasoul, S. A., Afeltra, G., Hakala, H., Minelli, E., & Strozzi, F. (2022). Organisational learning, learning organisation, and learning orientation: An integrative review and framework. Human Resource Management Review, 32(3), Article ID 100854. https://doi.org/10.1016/j.hrmr.2021.100854
4) Alqasimi, A., Hilmi, M. F., & Abudaqa, A. (2022). Examining the role of entrepreneurial leadership, learning orientation and digital transformation on business performance: Quantitative analysis from SMEs of Dubai. International Journal of Accounting, Finance and Business, 7(43), 35–46. https://doi.org/10.55573/IJAFB.074303
5) Arora, A. K., & Rathi, P. (2019). Determinants for the adoption of digitalization by manufacturing SMEs in India: An empirical study. Prabandhan: Indian Journal of Management, 12(8), 7–21. https://doi.org/10.17010/pijom/2019/v12i8/146410
6) Baba, Y. (2015). Does learning orientation matter for nonprofit organization performance? Empirical evidence from Ghana. Leadership & Organization Development Journal, 36(3), 234–252. https://doi.org/10.1108/LODJ-05-2013-0056
7) Baker, W. E., & Sinkula, J. M. (1999). The synergistic effect of market orientation and learning orientation on organisational performance. Journal of the Academy of Marketing Science, 27, 411–427. https://doi.org/10.1177/0092070399274002
8) Baker, W. E., & Sinkula, J. M. (2002). Market orientation, learning orientation and product innovation: Delving into the organization's black box. Journal of Market-Focused Management, 5, 5–23. https://doi.org/10.1023/A:1012543911149
9) Basly, S. (2007). The internationalization of family SME: An organisational learning and knowledge development perspective. Baltic Journal of Management, 2(2), 154–180. https://doi.org/10.1108/17465260710750973
10) Bature, S. W., Sallehuddin, R. M., & Hin, C. W. (2018). Learning orientation, access to debt finance, organizational capability and performance of small and medium enterprises: A proposed model. Academy of Accounting and Financial Studies Journal, 22(3), 1–11.
11) Bedi, H. S. (2016). Does organizational demography determine firms' innovativeness? SSRN. https://ssrn.com/abstract=2884750
12) Bedi, H. S. (2018). A contingency approach to proactiveness - Business performance relationship. Indian Journal of Marketing, 48(12), 34–49. https://doi.org/10.17010/ijom/2018/v48/i12/139555
13) Bedi, H. S. (2019). Innovativeness, business performance and environmental uncertainty: A multivariate configuration. International Journal of Business Innovation and Research, 18(3), 328–345. https://doi.org/10.1504/IJBIR.2019.098252
14) Bedi, H. S., Vij, S., & Farooq, R. (2025). Maximizing business performance through entrepreneurial orientation: A multilevel analysis. International Journal of Innovation Science, 17(1), 72–93. https://doi.org/10.1108/IJIS-03-2023-0065
15) Bekata, A. T., & Kero, C. A. (2024). Customer orientation, open innovation and enterprise performance, evidence from Ethiopian SMEs. Cogent Business & Management, 11(1), Article no. 2320462. https://doi.org/10.1080/23311975.2024.2320462
16) Bontis, N., Crossan, M. M., & Hulland, J. (2002). Managing an organizational learning system by aligning stocks and flows. Journal of Management Studies, 39(4), 437–469. https://doi.org/10.1111/1467-6486.t01-1-00299
17) Brett, J. M., & Drasgow, F. (2002). The psychology of work: Theoretically based empirical research (1st ed.). Psychology Press. https://doi.org/10.4324/9781410602411
18) Cabrilo, S., & Dahms, S. (2020). The role of multidimensional intellectual capital and organizational learning practices in innovation performance. European Management Review, 17(4), 835–855. https://doi.org/10.1111/emre.12396
19) Calantone, R. J., Cavusgil, S. T., & Zhao, Y. (2002). Learning orientation, firm innovation capability, and firm performance. Industrial Marketing Management, 31(6), 515–524. https://doi.org/10.1016/S0019-8501(01)00203-6
20) Chen, X., & Chua, A. Y. (2024). Chapter 19: The role of influencer endorsements in users' willingness to pay for knowledge products: An empirical investigation (pp. 379–394). Edward Elgar Publishing. https://doi.org/10.4337/9781802203967.00029
21) Cheung, G. W., Cooper-Thomas, H. D., Lau, R. S., & Wang, L. C. (2024). Reporting reliability, convergent and discriminant validity with structural equation modeling: A review and best-practice recommendations. Asia Pacific Journal of Management, 41(2), 745–783. https://doi.org/10.1007/s10490-023-09871-y
22) Correia, R. J., Dias, J. G., Teixeira, M. S., & Campos, S. (2023). Building competitive advantages and business success: The role of learning orientation, reward systems and entrepreneurial orientation. European Business Review, 35(1), 92–119. https://doi.org/10.1108/EBR-03-2022-0051
23) Eze, U. C., Goh, G. G., Goh, C. Y., & Tan, T. L. (2013). Perspectives of SMEs on knowledge sharing. VINE Journal of Information and Knowledge Management System, 43(2), 210–236. https://doi.org/10.1108/03055721311329963
24) Fathi, A., Ren, X., & Rehg, J. M. (2011). Learning to recognize objects in egocentric activities. In CVPR 2011 (pp. 3281–3288). IEEE. https://doi.org/10.1109/CVPR.2011.5995444
25) Ferreira, J., Cardim, S., & Coelho, A. (2021). Dynamic capabilities and mediating effects of innovation on the competitive advantage and firm's performance: The moderating role of organizational learning capability. Journal of the Knowledge Economy, 12, 620–644. https://doi.org/10.1007/s13132-020-00655-z
26) Fida, B. A., Ahmed, U., Al-Balushi, Y., & Singh, D. (2020). Impact of service quality on customer loyalty and customer satisfaction in Islamic banks in the Sultanate of Oman. Sage Open, 10(2). https://doi.org/10.1177/2158244020919517
27) Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.2307/3151312
28) Goyal, A., Mishra, U. S., Mishra, S., & Ray, M. (2024). Effect of strategic orientation on firm performance: A mediation analysis. Prabandhan: Indian Journal of Management, 17(4), 58–74. https://doi.org/10.17010/pijom/2024/v17i4/173428
29) Gnizy, I., Baker, W. E., & Grinstein, A. (2014). Proactive learning culture: A dynamic capability and key success factor for SMEs entering foreign markets. International Marketing Review, 31(5), 477–505. https://doi.org/10.1108/IMR-10-2013-0246
30) Hair, J. F., Bush, R. P., & Ortinau, D. (2008). Marketing research. McGraw-Hill Higher Education.
31) Hakala, H. (2011). Strategic orientations in management literature: Three approaches to understanding the interaction between market, technology, entrepreneurial and learning orientations. International Journal of Management Reviews, 13(2), 199–217. https://doi.org/10.1111/j.1468-2370.2010.00292.x
32) Haryanto, A. T., Haryono, T., & Sawitri, H. S. (2017). Market orientation, learning orientation and SMES performance: The mediating role of innovation. International Review of Management and Marketing, 7(1), 484–491. https://www.econjournals.com/index.php/irmm/article/view/3527
33) Hooper, D., Coughlan, J., & Mullen, M. (2008). Evaluating model fit: A synthesis of the structural equation modelling literature. Proceedings of the 7th European Conference on Research Methodology for Business and Management Studies (pp. 195–200). Regent's College. https://scispace.com/pdf/evaluating-model-fit-a-synthesis-of-the-structural-equation-5eti7g5cdc.pdf
34) Huber, G. P. (1991). Organizational learning: The contributing processes and the literatures. Organization Science, 2(1), 88–115. https://www.jstor.org/stable/2634941
35) Hult, G. T., Ketchen Jr., D. J., & Reus, T. H. (2001). Organizational learning capacity and internal customer orientation within strategic sourcing units. Journal of Quality Management, 6(2), 173–192. https://doi.org/10.1016/S1084-8568(01)00036-0
36) Hult, G. T., Hurley, R. F., & Knight, G. A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429–438. https://doi.org/10.1016/j.indmarman.2003.08.015
37) Ibidunni, A. S., Agbi, B. D., & Kehinde, B. E. (2023). Interacting effects of tacit knowledge and learning orientation in improving firm performance. Journal of the Knowledge Economy, 14(3), 2539–2560. https://doi.org/10.1007/s13132-022-00978-z
38) Ismaila, A. O., Abubakar, M. M., Ali, S. S., & Isah, A. (2023). Relationships between organisational memory, learning orientation and firm performance in Nigeria. Yamtara-wala Journal of Arts, Management and Social Sciences, 3(2), 439–451. https://www.researchgate.net/publication/377890266
39) Jalagat, R., Bashayre, A., Dalluay, V., & Pineda, A. P. (2017). Correlates the relationship of service quality, customer satisfaction and customer retention on selected restaurants in Muscat, Sultanate of Oman. International Journal of Business Management, 5(9), 1–15. https://www.researchgate.net/publication/320020487
40) Jerez-Gómez, P., Céspedes-Lorente, J., & Valle-Cabrera, R. (2005). Organizational learning capability: A proposal of measurement. Journal of Business Research, 58(6), 715–725. https://doi.org/10.1016/j.jbusres.2003.11.002
41) Jöreskog, K. G., & Sörbom, D. (1993). LISREL 8: Structural equation modeling with the SIMPLIS command language. Scientific Software International; Lawrence Erlbaum Associates, Inc. https://psycnet.apa.org/record/1993-97878-000
42) Kalvakolanu, S., Balaji, D., & Bommaraju, S. (2018). Learning approaches: Whether demographics matter? - A study on business management students. Prabandhan: Indian Journal of Management, 11(7), 7–22. https://doi.org/10.17010/pijom/2018/v11i7/129936
43) Karpacz, J., & Wojcik-Karpacz, A. (2024). The relationship between learning orientation, firm performance and market dynamism in MSMEs operating in technology parks in Poland: An empirical analysis. Central European Management Journal, 32(2), 216–232. https://doi.org/10.1108/CEMJ-02-2023-0079
44) Kaur, G. P., & Bedi, H. S. (2024). The impact of market intelligence on business performance in SMEs: Examining the mediating effect of innovativeness. Journal of Logistics, Informatics and Service Science, 11(8), 230–250. https://doi.org/10.33168/JLISS.2024.0814
45) Kaur, G. P., Bedi, H. S., & Saini, H. (2025). Leveraging innovativeness for enhanced small and medium enterprises performance: The moderating role of learning orientation. Journal of Innovation and Entrepreneurship, 14, Article no. 65. https://doi.org/10.1186/s13731-025-00550-4
46) Keskin, H. (2006). Market orientation, learning orientation, and innovation capabilities in SMEs: An extended model. European Journal of Innovation Management, 9(4), 396–417. https://doi.org/10.1108/14601060610707849
47) Liao, S.-H., Fei, W.-C., & Liu, C.-T. (2008). Relationship between knowledge inertia, organizational learning and organization innovation. Technovation, 28(4), 183–195. https://doi.org/10.1016/j.technovation.2007.11.005
48) Mavondo, F. T., Chimhanzi, J., & Stewart, J. (2005). Learning orientation and market orientation: Relationship with innovation, human resource practices and performance. European Journal of Marketing, 39(11–12), 1235–1263. https://doi.org/10.1108/03090560510623244
49) McAdam, R., & Reid, R. (2001). SME and large organisation perceptions of knowledge management: Comparisons and contrasts. Journal of Knowledge Management, 5(3), 231–241. https://doi.org/10.1108/13673270110400870
50) McGuinness, T., & Morgan, R. E. (2005). The effect of market and learning orientation on strategy dynamics: The contributing effect of organisational change capability. European Journal of Marketing, 39(11/12), 1306–1326. https://doi.org/10.1108/03090560510623271
51) Morgan, R. E., & Berthon, P. (2008). Market orientation, generative learning, innovation strategy and business performance inter‐relationships in bioscience firms. Journal of Management Studies, 45(8), 1329–1353. https://doi.org/10.1111/j.1467-6486.2008.00778.x
52) Nasution, H. N., Mavondo, F. T., Matanda, M. J., & Ndubisi, N. O. (2011). Entrepreneurship: Its relationship with market orientation and learning orientation and as antecedents to innovation and customer value. Industrial Marketing Management, 40(3), 336–345. https://doi.org/10.1016/j.indmarman.2010.08.002
53) Otoo, C. O., Li, W., Pomegbe, W. W., & Dogbe, C. S. (2024). Effect of internal knowledge sourcing on multinational enterprise subsidiaries' service innovation performance: The mediating role of organisational learning. European Journal of International Management, 23(1), 60–87. https://doi.org/10.1504/EJIM.2024.138405
54) Priyono, A., & Hidayat, A. (2024). Fostering innovation through learning from digital business ecosystem: A dynamic capability perspective. Journal of Open Innovation: Technology, Market, and Complexity, 10(1), Article ID 100196. https://doi.org/10.1016/j.joitmc.2023.100196
55) Ramli, A., & Rasdi, R. M. (2021). Leveraging intellectual capital dimensions for promoting learning organization in a rural development agency. Pertanika Journal of Social Sciences and Humanities, 29(1), 669–688. https://doi.org/10.47836/PJSSH.29.1.37
56) Rhee, J., Park, T., & Lee, D. H. (2010). Drivers of innovativeness and performance for innovative SMEs in South Korea: Mediation of learning orientation. Technovation, 30(1), 65–75. https://doi.org/10.1016/j.technovation.2009.04.008
57) Robinson, V. M. (2001). Descriptive and normative research on organizational learning: Locating the contribution of Argyris and Schön. International Journal of Educational Management, 15(2), 58–67. https://doi.org/10.1108/EUM0000000005395
58) Sadler-Smith, E., Spicer, D. P., & Chaston, I. (2001). Learning orientations and growth in smaller firms. Long Range Planning, 34(2), 139–158. https://doi.org/10.1016/S0024-6301(01)00020-6
59) Sajjad, A., Ibrahim, Y., Shamsuddin, J., & Sharif, S. (2023). Impact of entrepreneurial orientation on SME performance: The moderating role of environmental turbulence. Prabandhan: Indian Journal of Management, 16(5), 18–36. https://doi.org/10.17010/pijom/2023/v16i5/172823
60) Schulze, A., Townsend, J. D., & Talay, M. B. (2022). Completing the market orientation matrix: The impact of proactive competitor orientation on innovation and firm performance. Industrial Marketing Management, 103, 198–214. https://doi.org/10.1016/j.indmarman.2022.03.013
61) Setini, M., Yasa, N. N., Supartha, I. W., Giantari, I. G., & Rajiani, I. (2020). The passway of women entrepreneurship: Starting from social capital with open innovation, through to knowledge sharing and innovative performance. Journal of Open Innovation: Technology, Market, and Complexity, 6(2), Article no. 25. https://doi.org/10.3390/joitmc6020025
62) Sinkula, J. M., Baker, W. E., & Noordewier, T. (1997). A framework for market-based organisational learning: Linking values, knowledge, and behavior. Journal Academy of the Market Science, 25(4), 305–18. https://doi.org/10.1177/0092070397254003
63) Sony, M., & Naik, S. (2011). Successful implementation of six sigma in services: An exploratory research in India Inc. International Journal of Business Excellence, 4(4), 399–419. https://doi.org/10.1504/IJBEX.2011.041059
64) Supyuenyong, V., Islam, N., & Kulkarni, U. (2009). Influence of SME characteristics on knowledge management processes: The case study of enterprise resource planning service providers. Journal of Enterprise Information Management, 22(1–2), 63–80. https://doi.org/10.1108/17410390910922831
65) Vashishtha, S. D., & Sharma, P. (2012). Intellectual capital in learning organizations. Prabandhan: Indian Journal of Management, 5(3), 34–39. https://doi.org/10.17010/pijom/2012/v5i3/60153
66) Vatsa, R., & Bhatnagar, P. (2021). Role of learning ability and learning agility for corporate success: A textual analysis. Prabandhan: Indian Journal of Management, 14(10), 24–37. https://doi.org/10.17010/pijom/2021/v14i10/166642
67) Verma, A., & Singh, P. (2020). Elucidating the effect of learning ability on employees' potential: A study of IT sector in India. Prabandhan: Indian Journal of Management, 13(2), 7–22. https://doi.org/10.17010/pijom/2020/v13i2/150561
68) Vij, S., & Bedi, H. S. (2016). Are subjective business performance measures justified? International Journal of Productivity and Performance Management, 65(5), 603–621. https://doi.org/10.1108/IJPPM-12-2014-0196
69) Wang, C. L., Ahmed, P. K., & Rafiq, M. (2008). Knowledge management orientation: Construct development and empirical validation. European Journal of Information Systems, 17(3), 219–235. https://doi.org/10.1057/ejis.2008.12
70) Wilson, G. A., & Liguori, E. (2023). Market orientation, failure learning orientation, and financial performance. Journal of Small Business Management, 61(6), 3027–3045. https://doi.org/10.1080/00472778.2022.2051177