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The existence of small and medium enterprises SMEs in developing countries can be considered as the
backbone of the countrys economy. Proved the existence of SMEs have been able to move the nations
economy and reduce unemployment there. Although the SME has some limitations, but in fact they are able
to compete with other companies. At the time of deteriorating economic conditions and many large
companies are threatened with bankruptcy, the SMEs to survive. Reality shows the strength of the SMEs.
SMEs strength arises when applying entrepreneurial vision that SMEs are able to bring the company to
grow and expand and gain increased profitability. At this time the success of SMEs to enhance the
companys growth is highly dependent on the ability of entrepreneurial owners. Only the owner who has a
strong entrepreneurial orientation are able to bring improvements for the company. The inability of the
owner to maintain the strength to face the challenge it will affect the decline in performance and failure of the
company Hill and McGowan, 1999. The purpose of this study was to determine the effect
of entrepreneurial orientation, market orientation with an intervening variable capabilitiies networking
flexibility in improving business performance
.
This study also their background research gap between entrepreneurial orientation with business performance.
There are some researchers found that the relationship between entrepreneurial orientation with a significant
and positive business performance Hult, Snow Kandemir, 2003; Wiklund Shepherd, 2005, but
there are researchers who discovered the relationship between entrepreneurial orientation to performance and
do not have a significant negative correlation Lumpkin Dess, 2001; Ana Lisboa, 2010.
Based on the background, the purpose of research and risep gap the research problem: How to build a model
of flexibility networking capabilities to improve business performance?
2. STUDY LIBRARY
2.1. Epitemology
of flexibility
networking capabilities
Learning organization is known in the business and management literature. But there is no universal
definition of a learning organization. Some definitions refer to the action-oriented activities and focus on
implementation, which is a concrete approach and determine Dill, 1999; Tsang, 1997. Garvin 2000
defines organizational learning as organizational skills to create, acquire, interpret, transfer and sharing of
knowledge, which is aimed at modifying its behavior to describe the knowledge and new insights.
Meanwhile, according to Taylor organizational learning is an opportunity given to employees so that the
organization becomes more efficient Luthans, 1995. A learning organization in several ways. Dixon, 1994
and Pearn et al. 1995 stated that the learning organization emphasizes the use of the learning process
in the level of individuals, groups and systems to transform the organization into various ways that can
improve the satisfaction of stakeholders. Kim 1993 emphasizes the importance of the relationship between
individual learning with organizational learning by stating that .... The organization mainly learn from
members of the organization. Individual learning and organizational learning are inseparable.
Organizations learn through individuals that are part of the organization. People employed because it has the
competence or knowledge, which they get from their work or from any formal training. Formal education is
one way to improve the ability of individuals and organizations that have benefited from the various
activities of individuals educated. Based on this view, learning is a phenomenon in which an organization to
benefit from organization members are skilled, flexible nature always adjust the environment; originality of
thought, current thinking. Today, individual learning does not guarantee organizational learning, but learning
organization is not going to happen without individual learning Garvin, 2000; Kim, 1993. A company to be
able to achieve its objectives in addition oriented to organizational learning that people - people who are
involved in the company have appropriate knowledge of their field - each is needed is also a marketing
relationship with the other party so that the products are sold in accordance with market needs.
Kotler 2000 states build relationships with consumers also built based on long-term relationships that satisfy
the other parties, such as suppliers, distributors and others in order to maintain the preferences and their
long-term business, the main function is covering all steps company to know and serve their customers well.
Winer 2001 relationship marketing as a strategy to build a good relationship with the customer in the long
term by combining the ability to respond instantly to serve customers.
The emergence of thought in the direction of relationship marketing is an integrated effort to identify,
maintain and build networks network with individual consumers. The network continues to be strengthened
in order to provide benefits to both parties through interactive contact, individual and provide added value
for the long term Berry 1983; Becker and Homburg 1999. The network continues to be strengthened in
order to provide benefits to both parties through interactive contact, individual and provide added value
for the long term Berry 1983; Becker and and Homburg 1999.
Based on the description above can be made
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epistemology of flexibility networking capabilities, as shown in Figure 1.
Figure : 1
Based on Figure 1 above can be explained on the proposition flexibility networking capabilities is the
companys performance can be achieved if the joint marketing produce long-term relationship with the
companys competitors, suppliers, customers who are flexible based on the mutual commitment to building
relationships, efforts to develop a partnership in various areas of potential , optimizing profits by
always doing continuous innovation and focus, adhere to maintain a predetermined agreement.
2.2. Flexibility networking capabilities
Study Gulati, Nohria, Zaheer, 2000, the Network is a variable that is considered important for all types of
companies, particularly with regard to the fact that the economic environment is becoming increasingly
competitive. Networks are becoming increasingly important because it allows companies to access
information, resources, markets and technology. Malecki, 1997, Information and social networking is
considered essential for the formation of the company and to the success and sustainability of the company.
Although all the companies taking part in formal and informal networks, larger companies are more likely to
make long-term cooperation contract, while smaller companies tend to involve himself in a more personal
contract personal and more are mutual reciprocal . Study Hakansson 1997 is important for the company
network consists of four areas: managerial area important for the company in determining the strategy
associated with other organizations, entrepreneurship, technology development networks can enrich and
prevent development and to areas with customer relationship . Such networks can rely on personal
contact and trust between individuals and can menyajikansumberdaya complement and reduce the
risk of opportunistic behavior and reduce transaction costs Granovotter, 1985. Models of regional
innovation systems developed to explain anything that could create innovative behavior among economic
actors, managers and employees, and the mix of companies and institutions and structural connection
between the two is necessary to stimulate innovation behavior Braczyk, Cook Heidenreich eds., 1996.
Many studies indicate that this kind of environment enrich the innovation and development company
Isaksen ed. 1997. 2.3. Entrepreneur orientation
Study Weerawerdeena 2003, entrepreneurship is the ability of creative and innovative as the basis, and
resources to find opportunities for success. Kottler 2000, entrepreneurial marketing is an integrated
concept that the era of change as it is today. Morris and Lewis 2002 Entrepreneurial Marketing is an activity
proactively
identify achieving
and maintaining
customer benefits through innovative approaches to risk management, the effectiveness of the resources,
and the development of value. Study Lumpkin and Dess 1996 and Wiklund and
Shepherd 2005 entrepreneurial orientation and organizational culture is closely linked to the process
of formulating a strategy that will provide a basis for decision-making
and implementation
of the
organizations business. Study Koh et al., 2007 entrepreneurial orientation plays an important role in
improving business performance. Millers study 1983 revealed that the entrepreneurial orientation into a
meaning that can be acceptable in light of business performance. Study Lumpkin and Dess, 1996,
entrepreneurial orientation refers to the processes, practices, and decision-making that led to the new
input and has three aspects of entrepreneurship, that is willing to take risks, to act proactively and always
innovative. Risk-taking entrepreneur is an attitude that involves a
willingness to commit resources. Koh et al. 2002, to the challenge to exploit the business strategy likely
outcome uncertainty. Proactive reflects the willingness of entrepreneurs to dominate competitors through a
combination of aggressive and motion. Proactive, such as introducing new production services on top of the
competition and activities for the upcoming demand anticipate in creating change and shape the
Creative individu
Csikszentmihalyi 1999
Flexibility; Originality of
thought, Smoothness think
Organizational Learning
Senge, 1990 Knowledge
individu
Nonaka
Takeuchi 1995
Relationship Marketing
Berry 1983
Interaction Relationship
Networking
Flexibility networking
capabilities
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environment. Innovative refers to the attitude of entrepreneurs who engage creatively in the process of
trial of the new ideas that allow generating new production methods to produce new products or
services, both for the market now and into new markets.
Study Wiklund, 1999 entrepreneurial orientation is closely related to the prime mover advantage that an
entrepreneur has the opportunity to take advantage and the emergence of these opportunities eventually
positive effect on business performance. Study Covin and Slevin 1991; Wiklund 1999, states that the
higher entrepreneurial orientation can enhance the companys ability to market its products to the better
business performance. Therefore, companies are increasingly innovative, proactive, and dare to take
risks tend to be able to perform better business. 2.4. Market orientation
Study Lukas and Ferrell 2000 Market orientation is a process
of generating
and providing
market information for the purpose of creating superior value
for consumers. Narver can Slater 1990 Market orientation is an orientation that focuses on the concept
of value creation - a high value for the consumer. Market orientation as a single dimensional construct
consisting of three components of behavior, ie, customer orientation, competitor orientation and
coordination between intra-company functions. Study Narver Slater, 1990. Customer orientation is
an adequate understanding of the target buyers, so superior value can be administered continuously -
constantly . Comprehension covers the entire value chain of buyers, both now and in the future
development. Thorough understanding of the value chain can be achieved through a buyers acquisition of
information about customers and knowledge of the political and economic barriers faced by every level
within
the distribution
channel. Thorough
understanding of the seller to make anyone understand its potential customers, both at present and in future,
what they want now and in the next moment, and what is perceived today as well as what they might feel
when that will come. Competitor orientation is understanding the strengths
and
weaknesses of
short-term and
long-term capabilities and strategies of potential competitors
Narver Slater, 1990. Competitor orientation has a strong relationship with the customer orientation in
terms collection includes information and thorough analysis of the technological capabilities of competitors
in an effort to measure the ability of competitors to satisfy buyers target Narver Slater, 1990. Basically
competitor orientation focuses on the following three questions: 1 any of our competitors? 2 technology
what they have to offer? 3 whether they offer an attractive alternative in our customer mala? Slater
Narver, 1994. Coordination between intra-company functions in a
coordinated manner to reflect the utilization of all resources in the enterprise real in order to create
superior value for buyers target Narver Slater 1990, enterprise resource integration coordinated closely
related to customer and competitor orientation where coordination is built by information obtained through
the
utilization of
resources and
coordinated, information is distributed to all parts of the
organization concerned. Next Narver Slater 1990 argued that the conditions for coordination between
functions can
be run
effectively and
their responsiveness and sensitivity to the needs of each
department of the department - the other departments within the company.
2.5. Business performance The main source for the company to achieve
