Fuelling Success : How Learning – Driven Innovation Supercharges SMEs’ Performance

Authors

DOI:

https://doi.org/10.17010/pijom/2025/v18i10/174989

Keywords:

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

Download data is not yet available.

Published

2025-10-15

How to Cite

Kaur, G. P., Saini, H., & Bedi, H. S. (2025). Fuelling Success : How Learning – Driven Innovation Supercharges SMEs’ Performance. Prabandhan: Indian Journal of Management, 18(10), 43–60. https://doi.org/10.17010/pijom/2025/v18i10/174989

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