Main Article Content
Companies that want to survive in the era of information technology disruption characterized by hyperconnected business operations must quickly adopt social media technology. The problems faced by the business sector often delay the use of today's business models due to high anxiety. In fact, the role of digital marketing through the use of social media is very large. So, the company’s main key in responding to and seizing opportunities from this upheaval is innovation. The purpose of this study is to determine the effect of social media and innovation on SME business performance. The diffusion of innovations theory is used in this study as an affirmation that the implementation of technological innovation by SMEs is driven by the characteristics of innovation and organizational characteristics, bearing in mind that the current research unit of analysis is SMEs, namely organizations. In this research, to acquire a better understanding of the relationship between variables, quantitative approaches based on variance Structural Equation Modeling (SEM) and Partial Least Squares (PLS) were applied. Respondents were drawn from SMEs in the food and beverage sector in Surabaya, Indonesia, via an online questionnaire. The findings of this study provide positive and significant evidence between the role of social media utilization and innovativeness on SME performance. This means that SMEs in Surabaya have realized that social media is a very important tool for the success of a company. These technologies take information and knowledge sharing, interaction, and advertising to a higher level, resulting in benefits for organizations and customers. SMEs will fail and perish if they do not dare to innovate in technology.
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Author (s) hold copyrights and retain copyrights of articles if the article is accepted for publishing.
- The author grants the journal, right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal’s published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
- The article and any associated published material are distributed under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Public allowed to Share (copy and redistribute the material in any medium or format) and Adapt (remix, transform, and build upon the material) this journal article content.
Akgün, Ali E., Huseyin Ince, Salih Z. Imamoglu, Halit Keskin, and Ipek Kocoglu. 2014. “The Mediator Role of Learning Capability and Business Innovativeness between Total Quality Management and Financial Performance.” International Journal of Production Research 52(3):888–901. doi: 10.1080/00207543.2013.843796.
Akrimi, Yosra, and Romdhane Khemakhem. 2012. “What Drive Consumers to Spread the Word in Social Media?” Journal of Marketing Research & Case Studies 2012:1–14. doi: 10.5171/2012.969979.
Alegre, Joaquín, and Ricardo Chiva. 2013. “Linking Entrepreneurial Orientation and Firm Performance: The Role of Organizational Learning Capability and Innovation Performance.” Journal of Small Business Management 51(4):491–507. doi: 10.1111/JSBM.12005.
Amankwah-Amoah, Joseph, Zaheer Khan, Geoffrey Wood, and Gary Knight. 2021. “COVID-19 and Digitalization: The Great Acceleration.” Journal of Business Research 136(July):602–11. doi: 10.1016/j.jbusres.2021.08.011.
Aminu, Ibrahim Murtala, and Mohd Noor Mohd Shariff. 2015. “Influence of Strategic Orientation on SMEs Access to Finance in Nigeria.” Asian Social Science 11(4):298–309. doi: 10.5539/ASS.V11N4P298.
Aral, Sinan, Chrysanthos Dellarocas, and David Godes. 2013. “Introduction to the Special Issue—Social Media and Business Transformation: A Framework for Research.” Information Systems Research 24(1):3–13. doi: 10.1287/ISRE.1120.0470.
Arcese, Gabriella, Marco Valeri, Stefano Poponi, and Grazia Chiara Elmo. 2021. “Innovative Drivers for Family Business Models in Tourism.” Journal of Family Business Management 11(4):402–22. doi: 10.1108/JFBM-05-2020-0043/FULL/XML.
Ausat, Abu Muna Almaududi, and Tepi Peirisal. 2021. “Determinants of E-Commerce Adoption on Business Performance : A Study of MSMEs in Malang City , Indonesia.” Journal On Optimizations Of Systems At Industries 20(2):104–14. doi: 10.25077/josi.v20.n2.p104-114.2021.
Ausat, Abu Muna Almaududi, and Suherlan Suherlan. 2021. “Obstacles and Solutions of MSMEs in Electronic Commerce during Covid-19 Pandemic: Evidence from Indonesia.” BASKARA : Journal of Business and Entrepreneurship 4(1):11–19. doi: 10.54268/BASKARA.4.1.11-19.
Ayrancı, Ayşegül Ertuğrul, and Evren Ayrancı. 2015. “Connections between Leadership Features and Attitudes Towards Innovativeness: A Research on Small and Medium-Sized Business Owners.” Procedia - Social and Behavioral Sciences 195(July):1535–42. doi: 10.1016/j.sbspro.2015.06.456.
Brink, T. 2017. “B2B SME Management of Antecedents to the Application of Social Media.” Industrial Marketing Management 64:57–65. doi: 10.1016/j. indmarman.2017.02.007.
Brown, Jackie Brander, and Brenda McDonnell. 1995. “The Balanced Score-Card: Short-Term Guest or Long-Term Resident?” International Journal of Contemporary Hospitality Management 7(2–3):7–11. doi: 10.1108/09596119510146751/FULL/XML.
Bughin, J., M. Chui, and A. Miller. 2017. “Ow Companies Are Benefiting from Web 2.0: Mckinsey Global Survey Results.” Quarterly 17(6):1–9.
Calantone, Roger J., S. Tamer Cavusgil, and Yushan Zhao. 2002. “Learning Orientation, Firm Innovation Capability, and Firm Performance.” Industrial Marketing Management 31(6):515–24. doi: 10.1016/S0019-8501(01)00203-6.
Caseiro, Nuno, and Arnaldo Coelho. 2019. “The Influence of Business Intelligence Capacity, Network Learning and Innovativeness on Startups Performance.” Journal of Innovation & Knowledge 4(April):139–45. doi: 10.1016/j.jik.2018.03.009.
Chae, Ho-Chang, Chang E. Koh, and Victor R. Prybutok. 2014. “Information Technology Capability And Firm Performance : Contradictory Findings And Their Possible Causes.” MIS Quarterly 38(1):305–26.
Chai, Sangmi, Sanjukta Das, and H. Rao. 2014. “Factors Affecting Bloggers’ Knowledge Sharing: An Investigation Across Gender.” Journal of Management Information Systems 28(3):309–42. doi: 10.2753/MIS0742-1222280309.
Chikandiwa, S. T., E. Contogiannis, and E. Jembere. 2013. “The Adoption Of Social Media Marketing In South African Banks.” European Business Review 25(4):365–381. doi: 10.1108/EBR-02- 2013-0013.
Fernandes, Cristina I. M. A. S., João J. M. Ferreira, Carla Azevedo Lobo, and Mario Raposo. 2020. “The Impact of Market Orientation on the Internationalisation of SMEs.” Review of International Business and Strategy 30(1):123–43. doi: 10.1108/RIBS-09-2019-0120/FULL/PDF.
Fraccastoro, Sara, Mika Gabrielsson, and Ellen Bolman Pullins. 2021. “The Integrated Use of Social Media, Digital, and Traditional Communication Tools in the B2B Sales Process of International SMEs.” International Business Review 30(4):1–15. doi: 10.1016/j.ibusrev.2020.101776.
Garcia-Morales, V. J., R. Martín-Rojas, and M. E. Lardón-López. 2017. “Influence Of Social Media Technologies On Organizational Performance Through Knowledge And Innovation.” Baltic Journal of Management 13(3):345–367. doi: 10.1108/BJM-04-2017- 0123.
Garcia-Morales, Victor Jesus, Rodrigo Martín-Rojas, and María Esmeralda Lardón-López. 2018. “Influence of Social Media Technologies on Organizational Performance through Knowledge and Innovation.” Baltic Journal of Management 13(3):345–67. doi: 10.1108/BJM-04-2017-0123.
Garg, Poonam, Bhumika Gupta, Sam Dzever, Uthayasankar Sivarajah, and Vikas Kumar. 2020. “Examining the Relationship between Social Media Analytics Practices and Business Performance in the Indian Retail and IT Industries: The Mediation Role of Customer Engagement.” International Journal of Information Management 52(June):102069. doi: 10.1016/J.IJINFOMGT.2020.102069.
Gunday, Gurhan, Gunduz Ulusoy, Kemal Kilic, and Lutfihak Alpkan. 2011. “Effects of Innovation Types on Firm Performance.” International Journal of Production Economics 133(2):662–76. doi: 10.1016/J.IJPE.2011.05.014.
Hair, Joe F., Marko Sarstedt, Christian M. Ringle, and Jeannette A. Mena. 2011. “An Assessment of the Use of Partial Least Squares Structural Equation Modeling in Marketing Research.” Journal of the Academy of Marketing Science 40(3):414–33. doi: 10.1007/S11747-011-0261-6.
Hoq, Mohammad Ziaul. 2009. “Innovativeness: Its Antecedents and Impact on SME Business Performance.” SSRN Electronic Journal 4(11):100–110. doi: 10.2139/SSRN.1851425.
Igwenagu, Chinelo. 2016. Fundamentals of Research Methodology and Data Collection. Nigeria: LAP Lambert Academic Publishing.
De Jong, J., and R. Kemp. 2003. “Determinants of Co-Workers’ Innovative Behaviour: An Investigation Into Knowledge Intensive Services.” International Journal of Innovation Management 7(2):189–212.
Kafetzopoulos, Dimitrios, and Evangelos Psomas. 2015. “The Impact of Innovation Capability on the Performance of Manufacturing Companies the Greek Case.” Journal of Manufacturing Technology Management 26(1):104–30. doi: 10.1108/JMTM-12-2012-0117/FULL/XML.
Kallmuenzer, A., W. Nikolakis, M. Peters, and J. Zanon. 2018. “Trade-Offs between Dimensions of Sustainability: Exploratory Evidence from Family Firms in Rural Tourism Regions.” Journal of Sustainable Tourism 26(7):1204–1221. doi: 10.1080/ 09669582.2017.1374962.
Kusa, Rafał, Joanna Duda, and Marcin Suder. 2021. “Explaining SME Performance with FsQCA: The Role of Entrepreneurial Orientation, Entrepreneur Motivation, and Opportunity Perception.” Journal of Innovation and Knowledge 19(June):1–12. doi: 10.1016/j.jik.2021.06.001.
Latifi, Mohammad Ali, Shahrokh Nikou, and Harry Bouwman. 2021. “Business Model Innovation and Firm Performance: Exploring Causal Mechanisms in SMEs.” Technovation 107(May):1–12. doi: 10.1016/j.technovation.2021.102274.
Lewis, G. K., J. Byrom, and M. Grimmer. 2015. “Collaborative Marketing in a Premium Wine Region: The Role of Horizontal Networks.” International Journal of Wine Business Research 27(3):203–219. doi: 10.1108/IJWBR-06-2014-0028.
Li, Charlene. 2010. “Groundswell. Winning in a World Transformed by Social Technologies.” Strategic Direction 26(8):27–32. doi: 10.1108/SD.2010.05626HAE.002/FULL/XML.
Lintukangas, Katrina, Anni Kaisa Kähkönen, and Jukka Hallikas. 2019. “The Role of Supply Management Innovativeness and Supplier Orientation in Firms’ Sustainability Performance.” Journal of Purchasing and Supply Management 25(4):100558. doi: 10.1016/j.pursup.2019.100558.
Marchand, André, Thorsten Hennig-Thurau, and Jan Flemming. 2021. “Social Media Resources and Capabilities as Strategic Determinants of Social Media Performance.” International Journal of Research in Marketing 38(3):549–71. doi: 10.1016/j.ijresmar.2020.09.011.
Miralles-Marcelo, J. L., ´ M. del M. Miralles-Quiros, and I. Lisboa. 2014. “The Impact of Family Control on Firm Performance: Evidence from Portugal and Spain.” Journal of Family Business Strategy 5(2):156–168. doi: 10.1016/j.jfbs.2014.03.002.
Noruzy, Ali, Vahid Majazi Dalfard, Behnaz Azhdari, Salman Nazari-Shirkouhi, and Aliasghar Rezazadeh. 2013. “Relations between Transformational Leadership, Organizational Learning, Knowledge Management, Organizational Innovation, and Organizational Performance: An Empirical Investigation of Manufacturing Firms.” International Journal of Advanced Manufacturing Technology 64(5–8):1073–85. doi: 10.1007/S00170-012-4038-Y/TABLES/1.
Obermayer, Nora, Edit Kővári, Jaana Leinonen, Gerda Bak, and Marco Valeri. 2021. “How Social Media Practices Shape Family Business Performance: The Wine Industry Case Study.” European Management Journal (August):1–12. doi: 10.1016/j.emj.2021.08.003.
Prajogo, Daniel I. 2016. “The Strategic Fit between Innovation Strategies and Business Environment in Delivering Business Performance.” International Journal of Production Economics 171(1):241–49. doi: 10.1016/J.IJPE.2015.07.037.
Raymond, Louis, François Bergeron, and Anne Marie Croteau. 2013. “Innovation Capability and Performance Of Manufacturing SMEs: The Paradoxical Effect of IT Integration.” Journal of Organizational Computing and Electronic Commerce 23(3):249–72. doi: 10.1080/10919392.2013.807714.
Rodriguez, M., H. Ajjan, and R. M. Peterson. 2016. “Social Media in Large Sales Forces: An Empirical Study of the Impact of Sales Process Capability and Relationship Performance.” Journal of Marketing Theory and Practice 24(3):365–79. doi: 10.1080/10696679.2016.1170538.
Rubera, Gaia, and Ahmet H. Kirca. 2012. “Firm Innovativeness and Its Performance Outcomes: A Meta-Analytic Review and Theoretical Integration.” Journal of Marketing 76(Mei):130–47. doi: https://doi.org/10.1509/jm.10.0494.
Rugraff, Eric, and Michael W. Hansen. 2011. “Multinational Corporations and Local Firms in Emerging Economies.” Multinational Corporations and Local Firms in Emerging Economies 276. doi: 10.5117/9789089642943.
Salam, Sumona, and Abu Shams Mohammad Mahmudul Hoque. 2019. “The Role of Social Media and Effect of Relationship Marketing on SME Performance in Bangladesh: Multi-Group CFA.” Asian People Journal (APJ) 2(1):12–31.
Samad, Sarminah. 2012. “The Influence of Innovation and Transformational Leadership on Organizational Performance.” Procedia - Social and Behavioral Sciences 57(October):486–93. doi: 10.1016/J.SBSPRO.2012.09.1215.
Sedalo, Genevieve, Henry Boateng, and John Paul Kosiba. 2021. “Exploring Social Media Affordance in Relationship Marketing Practices in SMEs.” Digital Business 100017(September):1–9. doi: 10.1016/j.digbus.2021.100017.
Sfetcu, N. 2017. Web 2.0/Social Media/Social Networks; Create Space. USA: Independent Publishing Platform: Scotts Valley.
Shan, Peng, Michael Song, and Xiaofeng Ju. 2016. “Entrepreneurial Orientation and Performance: Is Innovation Speed a Missing Link?” Journal of Business Research 69(2):683–90. doi: 10.1016/J.JBUSRES.2015.08.032.
Standing, Craig, and Sarah Kiniti. 2011. “How Can Organizations Use Wikis for Innovation?” Technovation 31(7):287–95. doi: 10.1016/J.TECHNOVATION.2011.02.005.
Tajudeen, Farzana Parveen, Noor Ismawati Jaafar, and Sulaiman Ainin. 2018. “Understanding the Impact of Social Media Usage among Organizations.” Information & Management 55(3):308–21. doi: 10.1016/J.IM.2017.08.004.
Terziovski, Milé. 2010. “Innovation Practice and Its Performance Implications in Small and Medium Enterprises (SMEs) in the Manufacturing Sector: A Resource-Based View.” Strategic Management Journal 31(8):892–902. doi: 10.1002/SMJ.841.
Toanoglou, Michail, Samiha Chemli, and Marco Valeri. 2021. “The Organizational Impact of Covid-19 Crisis on Travel Perceived Risk across Four Continents.” Journal of Organizational Change Management (March). doi: 10.1108/JOCM-12-2020-0369/FULL/XML.
Ul Hassan, Masood, Sadia M. Shaukat Phil Scholar, Muhammad M. Saqib Nawaz Phil Scholar, and Saman Naz. 2013. “Effects of Innovation Types on Firm Performance: An Empirical Study on Pakistan’s Manufacturing Sector.” Pakistan Journal of Commerce and Social Sciences (PJCSS) 7(2):243–62.
Ussahawanitchakit, P. 2011. “Building Organizational Innovation of Electronics Businesses in Thailand: How Does It Affect Firm Performance?” International Journal of Business Strategy 11(3):130–37.
Valeri, M., and R. Baggio. 2020. “Italian Tourism Intermediaries: A Social Network Analysis Exploration.” Current Issues in Tourism 1–4. doi: 10.1080/ 13683500.2020.1777950.
Valeri, Marco, and Rodolfo Baggio. 2020. “A Critical Reflection on the Adoption of Blockchain in Tourism.” Information Technology & Tourism 23(2):121–32. doi: 10.1007/S40558-020-00183-1.
Wang, Catherine L., and Pervaiz K. Ahmed. 2004. “The Development and Validation of the Organisational Innovativeness Construct Using Confirmatory Factor Analysis.” European Journal of Innovation Management 7(4):303–13. doi: 10.1108/14601060410565056/FULL/XML.
Wang, Zhining, and Nianxin Wang. 2012. “Knowledge Sharing, Innovation and Firm Performance.” Expert Systems with Applications 39(10):8899–8908. doi: 10.1016/J.ESWA.2012.02.017.
Wardati, Nanda Kurnia, and Mahendrawathi Er. 2019. “The Impact of Social Media Usage on the Sales Process in Small and Medium Enterprises (SMEs): A Systematic Literature Review.” Procedia Computer Science 161:976–83. doi: 10.1016/j.procs.2019.11.207.
Wiklund, Johan, and Dean Shepherd. 2003. “Knowledge-Based Resources, Entrepreneurial Orientation, and the Performance of Small and Medium-Sized Businesses.” Strategic Management Journal 24(13):1307–14. doi: 10.1002/SMJ.360.
Yasa, Ni Nyoman Kerti, I. Gusti Ayu Ketut Giantari, Made Setini, Wayan Sarmawa, Putu Laksmit, Dewi Rahmayanti, and Ida Bagus Agung Dharmanegara. 2020. “Service Strategy Based on Tri Kaya Parisudha, Social Media Promotion, Business Values and Business Performance.” Management Science Letters 10(13):2961–72. doi: 10.5267/J.MSL.2020.5.029.
Yıldız, Sebahattin. 2010. “A Study on Measuring Business Performance in Banking Sector, Erciyes University.” Faculty of Economy and Administrative Sciences Journal 36:179–93.
Yıldız, Sebahattin, Faruk Baştürk, and İlknur Taştan Boz. 2014. “The Effect of Leadership and Innovativeness on Business Performance.” Procedia - Social and Behavioral Sciences 150(September):785–93. doi: 10.1016/j.sbspro.2014.09.064.
Yıldız, Sebahattin, and Adem Karakaş. 2012. “Defining Methods and Criteria for Measuring Business Performance: A Comparative Research Between the Literature in Turkey and Foreign.” Procedia - Social and Behavioral Sciences 58(October):1091–1102. doi: 10.1016/J.SBSPRO.2012.09.1090.
Zarella, Dan. 2010. The Social Media Marketing Book. edited by O. Media. USA.
Zhang, Ziqi, and Wasim Ahmed. 2019. “A Comparison of Information Sharing Behaviours across 379 Health Conditions on Twitter.” International Journal of Public Health 64(3):431–40. doi: 10.1007/S00038-018-1192-5/FIGURES/4.