Optimizing manufacturing firm performance in Indonesia through strategic orientation and servitization


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This study aims to investigate factors influencing servitization and firm performance within Indonesian national manufacturing companies, focusing on export-oriented entities such as automotive, electronics, textile, and food processing industries. Strategic orientations – market, technology, service, and learning – are investigated as key dimensions guiding firms’ strategic decisions amidst dynamic business environments. A comprehensive survey involving 100 companies representing a diverse spectrum of the Indonesian manufacturing sector is conducted. These companies encompass a range of statuses, including joint ventures (12%), multinational companies (2%), and national companies (86%). Through a purposive sampling strategy, representation across different company types is ensured to capture the breadth of perspectives within the industry. The quantitative approach involves surveying managers across various organizational levels, including top-level executives, middle managers, and front-line supervisors. Input from different managerial tiers is solicited to understand strategic orientations and their impact on firm performance. Data analysis, employing validation, descriptive statistics in MS Excel, and inferential statistics using Smart PLS yields significant insights. Market, service, and learning orientations emerge as influential factors in both basic and advanced services (p < 0.05), while technology orientation lacks statistical significance. Notably, market orientation significantly impacts advanced services (p < 0.05). Furthermore, the findings underscore the significant influence of service provision on firm performance across both basic and advanced services (p < 0.05). The critical role of strategic orientations, encompassing technology adoption, market positioning, service delivery, and organizational learning, in driving servitization and enhancing firm performance in Indonesian manufacturing is emphasized.

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    • Figure 1. Conceptual model
    • Figure 2. SEM-PLS structural model output
    • Table 1. Descriptive analysis
    • Table 2. Latent variable validity, reliability, and collinearity measures
    • Table 3. Discriminant validity
    • Table 4. Analysis of the indicators, outer loading, and collinearity
    • Table 5. Results (summarized)
    • Table 6. Structural path model
    • Conceptualization
      Wenny Candra Mandagie, Robert Kristaung
    • Funding acquisition
      Wenny Candra Mandagie
    • Investigation
      Wenny Candra Mandagie, Junaid Ali Saeed Rana
    • Project administration
      Wenny Candra Mandagie, Robert Kristaung, Junaid Ali Saeed Rana
    • Supervision
      Wenny Candra Mandagie, Robert Kristaung, Junaid Ali Saeed Rana
    • Validation
      Wenny Candra Mandagie, Robert Kristaung, Junaid Ali Saeed Rana
    • Writing – original draft
      Wenny Candra Mandagie, Robert Kristaung
    • Data curation
      Robert Kristaung
    • Formal Analysis
      Robert Kristaung, Junaid Ali Saeed Rana
    • Methodology
      Robert Kristaung, Junaid Ali Saeed Rana
    • Resources
      Robert Kristaung
    • Visualization
      Robert Kristaung
    • Software
      Junaid Ali Saeed Rana
    • Writing – review & editing
      Junaid Ali Saeed Rana