Abstract:
The study assessed the impact of market orientation on performance of
small and medium enterprises (SMEs); the mediating role of innovation. The study
was conducted on a total of 500 SMEs out of which 391 responses were received
representing 78.2% response rate. Purposive and convenience sampling techniques
were adopted in selecting the SMEs and questionnaires used to collect data.
Explanatory research design was used. The study used Structural Equation Model
(SEM) for data analysis and explored various relationships as presented in the
hypothesis. The findings indicated that, market orientation variable of customer
orientation positively and significantly predict performance; while competitor
orientation positively predicts performance; however, not significant. Interfunctional
orientation inversely and non-significantly impacts on performance of
SMEs in Ghana. Innovation partially mediates between customer orientation and
performance. Innovation fully mediates between inter-functional orientations and
performance whereas innovation has no mediation between competitor orientation
and performance. Businesses, particularly SMEs are encouraged to adopt and
embark on market orientation practices and implement innovative practices so as
to maximise performance.
