Networking capability and firm performance: the mediating role of market orientation and business process agility

Abstract

Purpose This study aims to examine the effect of networking capability through market orientation and business process agility on the firm performance of medium and large telecommunication technology providers in Indonesia. Design/methodology/approach Research data was collected from the executive management of telecommunication technology providers in Indonesia via a questionnaire survey to obtain 150 valid questionnaires for analysis. This study analysed the overall model fit and hypotheses through confirmatory factor analysis and structural equation modelling. Findings The results reveal that networking capability has a positive and significant effect on market orientation. However, networking capability does not have a significant direct effect on business process agility. The results also indicate that market orientation does not have a significant direct effect on firm performance but through the mediating role of business process agility. Practical implications The findings provide a practical foundation for the organisation’s networking capability to be framed by market orientation and business process agility to enhance firm performance. Originality/value The results indicate that market orientation mediates the relationship between networking capability and business process agility. The findings also reveal that business process agility mediates the relationship between market orientation and firm performance. This study also reconceptualises market orientation to embody the inter-partner coordination dimension and reconceptualise business process agility to embody business partner switching capability.