The Pareto sales network asset: a networked power perspective
Abstract
The purpose of this research is to develop a conceptual model dealing the relationship between EO and sales growth performance by proposing the Pareto sales network asset as a reliable bridge for mediating EO and sales growth performance in SMEs in Indonesia. Lending the network theory and the Pareto concept, we propose a concept on The Pareto sales network asset as a strategic asset for enhancing sales growth performance. The main finding of this study is that an entrepreneurial oriented firm who success in accessing the Pareto sales network which by nature is outside of the firm will get the networked power. Having, maintaining and using the networked power getting from a Pareto sales network asset will be a key asset for enhancing sales growth performance. The acceptance of the hypotheses on the role of the Pareto sales network asset demonstrated the importance of this strategic asset for SMEs in enhancing performance.
Keyword : entrepreneurial orientation, networked power, Pareto sales network asset, marketing support advantage, sales growth performance, Indonesia
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Al-Dhaafri HS, Al-Swidi A (2016) The impact of total quality management and entrepreneurial orientation on organizational performance. International Journal of Quality & Reliability Management 33 (5): 597-614. https://doi.org/10.1108/IJQRM-03-2014-0034
Al-Dhaafri HS, Al-Swidi AK, Yusoff RZB (2016) The mediating role of total quality management between the entrepreneurial orientation and the organizational performance. The TQM Journal 28 (1): 89-111. https://doi.org/10.1108/TQM-03-2014-003
Anderson ET (2002) Sharing the wealth: when should firms treat customers as partners?. Management Science 48 (8): 955-971. https://doi.org/10.1287/mnsc.48.8.955.170
Arbuckle JL (2016) IBM® SPSS® Amos™ User’s Guide.
Avlonitis GJ, Salavou HE (2007) Entrepreneurial orientation of SMEs, product innovativeness, and performance. Journal of Business Research60 (5): 566-575. https://doi.org/10.1016/j.jbusres.2007.01.001
Bagozzi RP (1981) Evaluating structural equation models with unobservable variables and measurement error: a comment. JMR, Journal of Marketing Research18 (3): 375. https://doi.org/10.2307/3150979
Baker WE, Sinkula JM (2009) The complementary effects of market orientation and entrepreneurial orientation on profitability in small businesses. Journal of Small Business Management 47 (4): 443-464.
Baron RM, Kenny DA (1986) The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology 51 (6). https://doi.org/10.1037/0022-3514.51.6.1173
Bayhan M, Serinkan C, Arat G (2013) Evaluation of staff attitudes related to innovation management: an empirical study in a service sector in Turkey. Procedia - Social and Behavioral Sciences 89: 323-327. https://doi.org/10.1016/j.sbspro.2013.08.854
Bental B, Spiegel M (1995) Network competition, product quality, and market coverage in the presence of network externalities. The Journal of Industrial Economics 43 (3): 197-208. https://doi.org/10.2307/2950481
Best RJ (2009) Market-based management: strategies for growing customer value and profitability (5th ed.) Upper Saddle River, New Jersey: Pearson Education, Inc.
Betancourt RR, Chocarro R, Cortiñas M, Elorz M, Mugica JM (2016) Channel choice in the 21st century: the hidden role of distribution services. Journal of Interactive Marketing 33: 1-12. https://doi.org/10.1016/j.intmar.2015.09.002
Brady MK, Robertson CJ (1999) An exploratory study of service value in the USA and Ecuador. International Journal of Service Industry Management10 (5): 469-486. https://doi.org/10.1108/09564239910289003
Castells M (2011) A Network Theory of Power. International Journal of Communication5: 15.
Covin JG, Slevin DP (1989) Strategic Management Of Small Firms In Hostile And Benign E. Strategic Management Journal 10 (1): 75. https://doi.org/10.1002/smj.4250100107
Craft RC, Leake C (2002) The Pareto principle in organizational decision making. Management Decision 40 (7/8): 729-733. https://doi.org/10.1108/00251740210437699
Davis JL, Bell RG, Payne GT, Kresier PM (2010) Entrepreneurial orientation and firm performance: the moderating role of managerial power. American Journal of Business 25(2): 41-54. https://doi.org/10.1108/19355181201000009
Deutscher F, Zapkau FB, Schwens C, Baum M, Kabst R (2016) Strategic orientations and performance: a configurational perspective. Journal of Business Research69 (2): 849-861. https://doi.org/10.1016/j.jbusres.2015.07.005
Emslie L, Bent R (2007) Public sector business support providers: marketing business support to the ethnic business sector. Marketing Intelligence & Planning25 (5): 460-482. https://doi.org/10.1108/02634500710774941
Engel Y, Kaandorp M, Elfring T (2017) Toward a dynamic pro-cess model of entrepreneurial networking under uncertainty. Journal of Business Venturing32 (1): 35-51. https://doi.org/10.1016/j.jbusvent.2016.10.001
Fabella RV (2000) Generalized sharing, membership size and pareto efficiency in teams. Theory and Decision48 (1): 47-60. https://doi.org/10.1023/A:1005236224786
Farooq R (2016) Role of structural equation modeling in scale development. Journal of Advances in Management Research13 (1): 75-91. https://doi.org/10.1108/JAMR-05-2015-0037
Fornell C, Larcker DF (1981) Structural equation models with unobservable variables and measurement error: algebra and statistics. JMR, Journal of Marketing Research18 (3): 382. https://doi.org/10.2307/3150980
Frank H, Kessler A, Fink M (2010) Entrepreneurial orientation and business performance – a replication study. Schmalenbach Business Review62 (2): 175-198. https://doi.org/10.1007/BF03396804
Goffin K (1998) Customer support distribution channels: five exploratory case studies. The Cranfield School of Management Working Papers Series, (SWP 20/98). Cranfield Bedfordshire.
Green KW, Whitten D, Inman RA (2012) Aligning marketing strategies throughout the supply chain to enhance performance. Industrial Marketing Management41 (6): 1008-1018. https://doi.org/10.1016/j.indmarman.2012.02.003
Haas A, Snehota I, Corsaro D (2012) Creating value in business relationships: the role of sales. Industrial Marketing Ma-nagement41 (1): 94-105. https://doi.org/10.1016/j.indmar-man.2011.11.004
Homburg C, Steiner VV, Totzek D (2009) Managing dynamics in a customer portfolio. Journal of Marketing73: 70-89. https://doi.org/10.1509/jmkg.73.5.70
Home N (2011) Entrepreneurial orientation of grocery retailers in Finland. Journal of Retailing and Consumer Services18 (4): 293-301. https://doi.org/10.1016/j.jretconser.2011.02.003
Hughes M, Morgan RE (2007) Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial Marketing Management 36 (5): 651-661. https://doi.org/10.1016/j.indmarman.2006.04.003
Iyer AV, Bergen ME (1997) Quick response in manufacturer-retailer channels. Management Science43 (4): 559-570. https://doi.org/10.1287/mnsc.43.4.559
Kantur D (2016) Strategic entrepreneurship: mediating the entre-preneurial orientation-performance link. Management Decision54 (1): 24-43. https://doi.org/10.1108/MD-11-2014-0660
Karray S (2015) Cooperative promotions in the distribution channel. Omega51: 49-58. https://doi.org/10.1016/j.ome-ga.2014.07.009
Lavie D (2007) Alliance portfolios and firm performance: a study of value creation and appropriation in the U.S. software industry. Strategic Management Journal28 (12): 1187-1212. https://doi.org/10.1002/smj.637
Lee TR, Hsu Y, Lin C-J, Phusavat K, Sinnarong N (2011) Vertical Integration in the Taiwan Aquaculture Industry. Managing Global Transitions 11 (1): 61–78, 17.
Li Y-H, Huang J-W, Tsai M-T (2009) Entrepreneurial orientation and firm performance: the role of knowledge creation process. Industrial Marketing Management38 (4): 440-449. https://doi.org/10.1016/j.indmarman.2008.02.004
Liao L-K, Lin Y-M, Lin T-W (2016) Non-financial performance in product market and capital expenditure. Journal of Business Research 69 (6): 2151-2159. https://doi.org/10.1016/j.jbusres.2015.12.023
Lumpkin GT, Dess GG (1996) Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review 21 (1): 135-172. https://doi.org/10.5465/amr.1996.9602161568
Lumpkin GT, Dess GG (2001) Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle. Journal of Business Venture16: 429-451. https://doi.org/10.1016/S0883-9026(00)00048-3
Madsen EL (2007) The significance of sustained entrepreneurial orientation on performance of firms – a longitudinal analysis. Entrepreneurship & Regional Development19 (2): 185-204. https://doi.org/10.1080/08985620601136812
Merlo O, Auh S (2009) The effects of entrepreneurial orientation, market orientation, and marketing subunit influence on firm performance. Marketing Letters20 (3): 295-311. https://doi.org/10.1007/s11002-009-9072-7
Miller D (1983) The correlates of entrepreneurship in three types of firms. Management Science29 (7): 770-791. https://doi.org/10.1287/mnsc.29.7.770
Miller D, Friesen PH (1982) Innovation in conservative and entrepreneurial firms: two models of strategic momentum. Strategic Management Journal (pre-1986)3 (1): 1.
Morgan NA (2012) Marketing and business performance. Journal of the Academy of Marketing Science40 (1): 102-119. https://doi.org/10.1007/s11747-011-0279-9
Morgan NA, Clark BH, Gooner R (2002) Marketing productivity, marketing audits, and systems for marketing performance assessment Integrating multiple perspectives. Journal of Business Research55: 363-375. https://doi.org/10.1016/S0148-2963(00)00162-4
Morgan T, Anokhin S, Wincent J (2016) Entrepreneurial orientation, firm market power and opportunism in networks. Journal of Business & Industrial Marketing 31 (1): 99-111. https://doi.org/10.1108/JBIM-03-2014-0063
Morris MH, Schindehutte M, LaForge RW (2002) Entrepreneurial marketing: a construct for integrating emerging entrepreneurship and marketing perspectives. Journal of Marketing Theory and Practice 10 (4): 1-19. https://doi.org/10.1080/10696679.2002.11501922
Naudé P, Zaefarian G, Najafi Tavani Z, Neghabi S, Zaefarian R (2014) The influence of network effects on SME performance. Industrial Marketing Management43 (4): 630-641. https://doi.org/10.1016/j.indmarman.2014.02.004
Pearce II JA, Fritz DA, Davis PS (2010) Entrepreneurial orientation and the performance of religious congregations as predicted by Rational Choice Theory. Entrepreneurship Theory and Practice 34 (1): 219-248. https://doi.org/10.1111/j.1540-6520.2009.00315.x
Raassens N, Wuyts S, Geyskens I (2014) The performance implications of outsourcing customer support to service providers in emerging versus established economies. International Journal of Research in Marketing31 (3): 280-292. https://doi.org/10.1016/j.ijresmar.2014.01.002
Ramachandran K, Ramnarayan S (1993) Entrepreneurial orien-tation and networking: some Indian Evidence. Journal of Business Venturing8: 513-524. https://doi.org/10.1016/0883-9026(93)90036-5
Rauch A, Wiklund J, Lumpkin GT, Frese M (2009) Entrepreneurial orientation and business performance: an assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice 33 (3): 761-787. https://doi.org/10.1111/j.1540-6520.2009.00308.x
Rust RT, Ambler T, Carpenter GS, Kumar V, Srivastava RK (2004) Measuring marketing productivity: current knowledge and future directions. Journal of Marketing68: 76-89. https://doi.org/10.1509/jmkg.68.4.76.42721
Sanders RE (1987) The Pareto Principle: its use and abuse. The Journal of Services Marketing1(2): 37. https://doi.org/10.1108/eb024706
Semrau T, Ambos T, Sascha K (2016) Entrepreneurial orientation and SME performance across societal cultures: an interna-tional study. Journal of Business Research69 (5): 1928-1932. https://doi.org/10.1016/j.jbusres.2015.10.082
Shane S, Locke EA, Collins CJ (2003) Entrepreneurial motivation. Human Resource Management Review 13 (2): 257-279. https://doi.org/10.1016/S1053-4822(03)00017-2
Soininen J, Martikainen M, Puumalainen K, Kyläheiko K (2012) Entrepreneurial orientation: growth and profitability of Finnish small- and medium-sized enterprises. International Journal of Production Economics 140 (2): 614-621. https://doi.org/10.1016/j.ijpe.2011.05.029
Sullivan UY, Peterson RM, Krishnan V (2012) Value creation and firm sales performance: the mediating roles of strategic account management and relationship perception. Industrial Marketing Management 41 (1): 166-173. https://doi.org/10.1016/j.indmarman.2011.11.019
Tabachnick BG, Fidell LS (2012) Using multivariate statistics (6 ed) New York: Pearson Publisher.
Tang J, Tang Z, Zhang Y, Li Q (2007) The impact of entrepreneurial orientation and ownership type on firm performance in the emerging region of China. Journal of Developmental Entrepreneurship 12 (4): 383-397. https://doi.org/10.1142/S1084946707000733
Tsybina E, Rebiazina V (2013) Managing portfolios of interconnected customers: evidence from Russian B2B market. Journal of Business & Industrial Marketing 28 (3): 229-239. https://doi.org/10.1108/08858621311302886
Walter A, Auer M, Ritter T (2006) The impact of network capabilities and entrepreneurial orientation on university spin-off performance. Journal of Business Venturing 21 (4): 541-567. https://doi.org/10.1016/j.jbusvent.2005.02.005
Wang G, Dou W, Zhu W, Zhou N (2015) The effects of firm capabilities on external collaboration and performance: the moderating role of market turbulence. Journal of Business Research 68 (9): 1928-1936. https://doi.org/10.1016/j.jbusres.2015.01.002
Wiklund J (1999) The sustainability of the entrepreneurial orientation – performance relationship. Entrepreneurships Theory and Practice, Fall, 37-48. https://doi.org/10.1177/104225879902400103
Wolff JA, Pett TL, Ring JK (2015) Small firm growth as a function of both learning orientation and entrepreneurial orientation: an empirical analysis. International Journal of Entrepreneurial Behavior & Research21 (5): 709-730. https://doi.org/10.1108/IJEBR-12-2014-0221
York JG, Venkataraman S (2010) The entrepreneur–environment nexus: uncertainty, innovation, and allocation. Journal of Business Venturing 25 (5): 449-463. https://doi.org/10.1016/j.jbusvent.2009.07.007