Market orientation and SCM strategy on SME organizational performances: the mediating effect of market performance

Figures & data

Figure 1. Research model.

Table 1. Operational definition of variables

No.	Variables	Reference	Indicator
1	Market Orientation	Slater and Narver (2000); Green et al. (2006)	Customer orientation; competitor orientation; inter-functional coordination
	Supply Chain Management Strategy	Render and Heizer (2014)	Number of suppliers; vertical integration; joint venture; keiretsu network; virtual company
3.	Market Performance	Steers (1977); Green et al. (2006)	Rate of return to shareholders; market value added; annual profit
4.	Financial performance	Pekuri et al. (2011)	Rate of return on sales; profitability; sales growth; improved work productivity; production cost improvement
5.	Operational Performance	Al-Hayaly and Alnajjar (2016); Green et al. (2006)	Market share; new product launching; quality; marketing effectiveness; customer satisfaction

Table 2. Demographic statistics of respondent

Characteristics	Classification	Freq.	Percentage
Company Age (years)	< 5	23	23.3
	5–10	55	36.7
	11–15	43	28.7
	16–20	17	11.3
Number of suppliers	5–10	66	44
	11–15	55	36.7
	16–20	29	19.3
Number of distributors	1–5	42	28
	6–10	61	40.7
	11–15	47	31.3
Number of retailers	1–5	18	12
	6–10	56	37.3
	10–1	41	27.3
	>15	35	23.4
Number of employees	1–10	47	31.3
	11–20	65	43.3
	>20	38	25.4

Table 3. Validity test results

Variable	Items	r-stat.	Cronbach’s Alpha
MO	MO1	0.757	0.871
	MO2	0.759
	MO3	0.744
SCM	SCM1	0.722	0.915
	SCM2	0.732
	SCM3	0.810
	SCM4	0.810
	SCM5	0.793
	SCM6	0.696
MP	MP1	0.752	0.868
	MP2	0.787
	MP3	0.843
FP	FP1	0.702	0.902
	FP2	0.743
	FP3	0.710
	FP4	0.791
	FP5	0.839
OP	OP1	0.765	0.899
	OP2	0.711
	OP3	0.779
	OP4	0.852
	OP5	0.650

Table 4. GOF model testing results

GOF Index	Cut—off value	Model results	Information
Chi-square	Expected a small value	100.360	Good fit
Probability	> 0.05	0.053	Good fit
CMIN/DF	< 2	1.270	Good fit
GFI	> 0.90	0.929	Good fit
RMSEA	< 0.08	0.043	Good fit
AGFI	> 0.90	0.877	Marginal
TLI	> 0.90	0.984	Good fit
CFI	> 0.90	0.989	Good fit

Figure 2. GoF indices.

Table 5. Empirical results of structural equation modeling

Hypothesis				Estimate	S.E.	C.R.	p
H1	Market orientation	→	Market performance	−0.100	0.090	−1.115	0.265
H2	Market orientation	→	Financial performance	0.053	0.062	0.854	0.393
H3	Market orientation	→	Operational performance	0.065	0.072	0.663	0.093
H4	SCM strategy	→	Market performance	0.596	0.085	7.024	0.000
H5	SCM strategy	→	Financial performance	0.645	0.089	6.877	0.000
H6	SCM Strategy	→	Operational Performance	0.198	0.090	2.201	0.028
H7	Market performance	→	Financial performance	0.617	0.083	7.444	0.000
H8	Market performance	→	Operational performance	0.547	0.098	5.571	0.000
H9	Financial performance	→	Operational performance	0.573	0.091	6.175	0.000

Figure 3. Research model test results.

Table 6. Direct and indirect influence

Mediating Variable	Direct Effect			Indirect Effect		Total Effect
	MP	FP	OP	MP	OP	MP	FP	OP
Market Orientation	−0.10	0.053	-	-	−0.53	−0.10	0.053	-
SCM Strategy	0.596	-	0.198	-	0.326	0.596	-	0.198

MP: Market Performance; FP: Financial performance; OP: Operational Performance

Table 7. Sobel test results

Hypothesis		a	Sa	b	Sb	Ab	Sobel	T-stat	T-table	Conclusion
H10	MO-MP-FP	−0.1	0.09	0.617	0.83	−0.0617	0.010	−6,161	1.976	Rejected
H11	MO-MP-OP	−0.1	0.09	0.547	0.098	−0.0547	0.0509	−1.073	1.976	Rejected
H12	SCM-MP-FP	0.596	0.085	0.617	0.083	0.376	0.072	5.076	1.976	Accepted
H13	SCM-MP-OP	0.596	0.085	0.547	0.098	0.326	0.0751	4.340	1.976	Accepted

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