The Effect of Information Communication Technology Readiness and Knowledge Management on Entrepreneurial Strategic Orientation and its Implications on Firm Performance

Abstract

ABSTRACT This research aims to investigate the effect of the information communication technology readiness and knowledge management on entrepreneurial strategic orientation and their implication to firm performance. The methodology of this research was explanatory research with hypothesis testing for examining seven hypotheses. The study populations were small medium enterprises located in DKI Jakarta, with a sample size of 392 SMEs. Data for this study were collected using questionnaires, and structural equation modeling (SEM) was employed for data analysis. The results of this research were as follows: (1) Information communication technology readiness positively and significantly influenced entrepreneurial strategic orientation; (2) knowledge management positively and significantly influenced entrepreneurial strategic orientation; (3) information communication technology readiness and knowledge management positively and significantly influenced entrepreneurial strategic orientation; (4) information communication technology readiness positively and significantly influenced firm performance; (5) knowledge management positively and significantly influenced firm performance; (6) entrepreneurial strategic orientation positively and significantly influenced firm performance; and (7) information communication technology readiness, knowledge management, and entrepreneurial strategic orientation positively and significantly influenced firm performance. The mediating effect of entrepreneurial strategic orientation increased the effects of information communication technology readiness and knowledge management on firm performance. The results of this research indicate that the effect of information communication technology readiness and knowledge management on entrepreneurial strategic orientation, information communication technology readiness, and knowledge management on entrepreneurial strategic orientation on firm performance of SMEs of Jakarta. All of seven hypotheses that are proposed in this research can be accepted. Information communication technology readiness as an independent variable was the strongest influence on entrepreneurial strategic orientation, and entrepreneurial strategic orientation was the strongest influence on firm performance. This dissertation also discusses the findings and limitations, theoretical and practical contribution, theoretical and managerial implications of the study, and suggestions for future research.