Title: THE EFFECT OF MARKET ORIENTATION ON ABSORPTIVE CAPACITY AND SUPPLIER INNOVATION IN THE AUTOMOTIVE INDUSTRY: THE MODERATING EFFECT OF EMPOWERMENT CLIMATE

Author: AGITYA KUSUMA KAMALALYA

Affiliations : Master of Science in Management Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

Knowledge sources, both internal and external to the company, are often crucial in the innovation process. A company's market orientation shapes market intelligence gathered from competitors and customers, as well as how it is disseminated. Pre-existing knowledge can shape absorptive capacity, the capability to recognize the value of new information, assimilate it, and apply it in innovation. An empowering climate is expected to further strengthen innovation. This study aims to determine the effect of market orientation on suppliers' absorptive capacity and the influence of absorptive capacity on company innovation. It also examines whether the empowering climate created by Astra has a moderating effect. This research is expected to provide implications for Astra in continuously improving its supplier relationships. The study was conducted through a survey of supplier companies of PT Astra Internasional, Tbk. (Astra). Partial Least Square (PLS) was used as a measurement technique. The study was conducted on 87 respondents selected using a purposive sampling technique.

Keywords: market orientation, potential absorptive capacity, realized absorptive capacity, empowerment climate, supplier innovation

Sources: http://repository.unair.ac.id/38616/