Exploring Extended Configuration of Digital Eco-Dynamic Influence on Small E-Business' Product Innovation

- Yuniarty - Bina Nusantara University, Jakarta, 11480, Indonesia
Idris Gautama So - Bina Nusantara University, Jakarta, 11480, Indonesia
Sri Bramantoro Abdinagoro - Bina Nusantara University, Jakarta, 11480, Indonesia
Mohammad Hamsal - Bina Nusantara University, Jakarta, 11480, Indonesia

Citation Format:

DOI: http://dx.doi.org/10.30630/joiv.6.2-2.1145


This study comprehensively explores the factors affecting product innovation performance in small e-businesses. The effects of the broader composition of digital eco-dynamics on the performance of product innovation of small businesses are little understood. This study tries to fill in the gaps and investigate the interdependencies above. This study offers the novelty of using RICH as a construct that can improve innovation performance, expanding on a digital eco-dynamic that has not been developed for ten years. Confirmatory factor analysis, descriptive statistics, construct reliability, average variance extracted, and the RMSEA model of fit test was used to analyze data from 300 useable responses. The test reliability and validity of the empirical model were evaluated through linguist reviews and statistically tested with construct reliability coefficients and confirmatory factor analysis. The findings also suggest that IT capability, dynamic capability, environmental uncertainty, and resource induce coping heuristics positively impact product innovation performance in small e-businesses. This research will contribute to developing innovation theory by offering RICH as a solution. The finding that RICH is positively and significantly related to innovation performance is significant for business actors, mainly because it is in the context of developing countries. For entrepreneurs, the findings of this study suggest that developing resources in a manner consistent with the RICH strategy for companies to be more entrepreneurially oriented. In this way, the development and actualization of cognitive resources can reduce uncertainty and lead to resource acquisition and resource protection by entrepreneurs


Digital Eco-Dynamic; RICH; IT Capability; Dynamic Capability; SME; Innovation Performance; e-business

Full Text:



K. N. Dervitsiotis, "Developing full-spectrum innovation capability for survival and success in the global economy," Total Qual. Manag. Bus. Excell., vol. 21, no. 2, pp. 159–170, 2010, doi: 10.1080/14783360903549865.

H. Salavou, G. Baltas, and S. Lioukas, “Organisational innovation in SMEs,” Eur. J. Mark., vol. 38, no. 9/10, pp. 1091–1112, 2004, doi: 10.1108/03090560410548889.

O. K. Lee, V. Sambamurthy, K. H. Lim, and K. K. Wei, "How Does IT Ambidexterity Impact Organizational Agility?," Inf. Syst. Res., vol. 26, no. 2, pp. 398–417, Jun. 2015, doi: 10.1287/isre.2015.0577.

G. Zaefarian, S. Forkmann, M. Mitręga, and S. C. Henneberg, "A Capability Perspective on Relationship Ending and Its Impact on Product Innovation Success and Firm Performance," Long Range Plann., vol. 50, no. 2, pp. 184–199, 2017, doi: https://doi.org/10.1016/j.lrp.2015.12.023.

D. Prajogo and C. M. Mcdermott, "Antecedents of Service Innovation in SMEs: Comparing the Effects of External and Internal Factors," J. Small Bus. Manag., vol. 52, no. 3, pp. 521–540, 2014, doi: 10.1111/jsbm.12047.

F. C. I., F. J. J., V. P. M., and M. Carla, "The effects of coopetition on the innovation activities and firm performance: Some empirical evidence," Compet. Rev. An Int. Bus. J., vol. 29, no. 5, pp. 622–645, Jan. 2019, doi: 10.1108/CR-12-2018-0080.

M. Saunila, "Innovation capability for SME success: perspectives of financial and operational performance," J. Adv. Manag. Res., vol. 11, no. 2, pp. 163–175, Jul. 2014, doi: 10.1108/JAMR-11-2013-0063.

M. Spriggs, A. Yu, D. Deeds, and R. L. Sorenson, "Too Many Cooks in the Kitchen: Innovative Capacity, Collaborative Network Orientation, and Performance in Small Family Businesses," Fam. Bus. Rev., vol. 26, no. 1, pp. 32–50, 2013, doi: 10.1177/0894486512468600.

M.-L. Verreynne, A. M. Williams, B. W. Ritchie, S. Gronum, and K. S. Betts, "Innovation diversity and uncertainty in small and medium sized tourism firms," Tour. Manag., vol. 72, pp. 257–269, 2019, doi: https://doi.org/10.1016/j.tourman.2018.11.019.

D. I. Prajogo and P. K. Ahmed, "Relationships between innovation stimulus, innovation capacity, and innovation performance," R D Manag., vol. 36, no. 5, pp. 499–515, 2006, doi: 10.1111/j.1467-9310.2006.00450.x.

S. X. Zeng, X. M. Xie, and C. M. Tam, "Relationship between cooperation networks and innovation performance of SMEs," Technovation, vol. 30, no. 3, pp. 181–194, 2010, doi: 10.1016/j.technovation.2009.08.003.

O. A. El Sawy, A. Malhotra, Y. K. Park, and P. A. Pavlou, "Seeking the configurations of digital ecodynamics: It takes three to tango," Inf. Syst. Res., vol. 21, no. 4, pp. 835–848, 2010, doi: 10.1287/isre.1100.0326.

Yuniarty, I. Gautama So, S. B. Abdinagoro, and M. Hamsal, "Completing the Configuration of Digital Eco-Dynamic to Improve the Innovation Performance of SMEs," in 2021 6th International Conference on Business and Industrial Research (ICBIR), May 2021, pp. 179–183, doi: 10.1109/ICBIR52339.2021.9465841.

Yuniarty, I. G. So, S. B. Abdinagoro, and M. Hamsal, "Sustaining the Innovation Performance of E-Business SMEs Through Digital Eco-Dynamic to Survive in the Covid-19 Pandemic," in 2021 International Conference on Information Management and Technology (ICIMTech), Aug. 2021, pp. 761–766, doi: 10.1109/ICIMTech53080.2021.9534922.

S. E. Lanivich, "The RICH Entrepreneur: Using Conservation of Resources Theory in Contexts of Uncertainty," Entrep. Theory Pract., vol. 39, no. 4, pp. 863–894, 2015, doi: 10.1111/etap.12082.

C. L. Wang and P. K. Ahmed, "The development and validation of the organisational innovativeness construct using confirmatory factor analysis," Eur. J. Innov. Manag., vol. 7, no. 4, pp. 303–313, 2004, doi: 10.1108/14601060410565056.

H. Aksoy, "How do innovation culture, marketing innovation and product innovation affect the market performance of small and medium-sized enterprises (SMEs)?," Technol. Soc., vol. 51, pp. 133–141, 2017, doi: 10.1016/j.techsoc.2017.08.005.

M. S. Freel, "Perceived Environmental Uncertainty and Innovation in Small Firms," Small Bus. Econ., vol. 25, no. 1, pp. 49–64, 2005, doi: 10.1007/s11187-005-4257-9.

T. A. Syed, C. Blome, and T. Papadopoulos, "Impact of IT Ambidexterity on New Product Development Speed: Theory and Empirical Evidence," Decis. Sci., vol. 51, no. 3, pp. 655–690, 2020, doi: 10.1111/deci.12399.

H. E. Aldrich, "Organizations and environments, Prentice Hall," Inc., Englewood Cliffs, NJ, 1979.

G. G. Dess and D. W. Beard, "Dimensions of Organizational Task Environments," Adm. Sci. Q., vol. 29, no. 1, p. 52, Mar. 1984, doi: 10.2307/2393080.

F. Wang, J. Zhao, M. Chi, and Y. Li, "Collaborative innovation capability in IT-enabled inter-firm collaboration," Ind. Manag. Data Syst., vol. 117, no. 10, pp. 2364–2380, Dec. 2017, doi: 10.1108/IMDS-09-2016-0392.

H. John, "Inter-firm R&D partnerships: an overview of major trends and patterns since 1960," Res. Policy, vol. 31, no. 4, pp. 477–492, 2002.

J. R. Diez, "Metropolitan Innovation Systems: A Comparison between Barcelona, Stockholm, and Vienna," Int. Reg. Sci. Rev., vol. 25, no. 1, pp. 63–85, Jan. 2002, doi: 10.1177/016001702762039385.

S. S. Omar, M. Higgs, C. S. Wei, and M. Ali, "Network ties' governance in entrepreneurial networking of SMEs: Cases of the ownermanagers in the southern region of Malaysia," Asian Acad. Manag. J., vol. 25, no. 1, pp. 85–101, 2020, doi: 10.21315/AAMJ2020.25.1.5.

G. Piccoli and B. Ives, "Sustaining competitive advantage-it-dependent strategic initiatives and sustained competitive advantage: A review and synthesis of the literature," Strateg. Inf. Manag. Challenges Strateg. Manag. Inf. Syst., vol. 29, no. 4, pp. 34–68, 2014, doi: 10.4324/9781315880884-10.

M. Wade and J. Hulland, "The resource-based view and information systems research: Review, extension, and suggestions for future research," MIS Q., vol. 28, no. 1, pp. 107–142, 2004.

S. Aral and P. Weill, "IT assets, organizational capabilities, and firm performance: How resource allocations and organizational differences explain performance variation," Organ. Sci., vol. 18, no. 5, pp. 763–780, 2007, doi: 10.1287/orsc.1070.0306.

S. E. Hobfoll, "The influence of culture, community, and the nested-self in the stress process: Advancing conservation of resources theory," Appl. Psychol., vol. 50, no. 3, pp. 337–421, 2001, doi: 10.1111/1464-0597.00062.

S. E. Hobfoll, "Conservation of resource caravans and engaged settings," J. Occup. Organ. Psychol., vol. 84, no. 1, pp. 116–122, 2011, doi: 10.1111/j.2044-8325.2010.02016.x.

S. E. Hobfoll, "Conservation of resources: a new attempt at conceptualizing stress.," Am. Psychol., vol. 44, no. 3, p. 513, 1989.

N. K. Malhotra, D. Nunan, and D. F. Birks, Marketing Research: An Applied Approach. 2017.

J. F. Hair, W. C. Black, B. J. Babin, and R. E. Anderson, "Multivariate Data Analysis," Hampshire, United Kingdom, 2019.

J. F. Hair, J. J. Risher, M. Sarstedt, and C. M. Ringle, "When to use and how to report the results of PLS-SEM," Eur. Bus. Rev., vol. 31, no. 1, pp. 2–24, Jan. 2019, doi: 10.1108/EBR-11-2018-0203.

R. B. Kline, Principles and practice of structural equation modeling. Guilford publications, 2015.

H. Gatignon, "Confirmatory factor analysis," in Statistical analysis of management data, Springer, 2014, pp. 77–154.

S. G. West, A. B. Taylor, and W. Wu, "Model fit and model selection in structural equation modeling," Handb. Struct. Equ. model., vol. 1, pp. 209–231, 2012.

S. H. Chuang and H. N. Lin, "Co-creating e-service innovations: Theory, practice, and impact on firm performance," Int. J. Inf. Manage., vol. 35, no. 3, pp. 277–291, 2015, doi: 10.1016/j.ijinfomgt.2015.01.002.

J. Karimi and Z. Walter, "Corporate Entrepreneurship, Disruptive Business Model Innovation Adoption, and Its Performance: The Case of the Newspaper Industry," Long Range Plann., vol. 49, no. 3, pp. 342–360, Jun. 2016, doi: 10.1016/j.lrp.2015.09.004.

S. Adomako, "Resource-induced coping heuristics and entrepreneurial orientation in dynamic environments," J. Bus. Res., vol. 122, no. September, pp. 477–487, 2021, doi: 10.1016/j.jbusres.2020.09.026.

S. E. Lanivich, A. Bennett, S. R. Kessler, N. McIntyre, and A. W. Smith, "Rich with well-being: An entrepreneurial mindset for thriving in early-stage entrepreneurship," J. Bus. Res., no. June, 2020, doi: 10.1016/j.jbusres.2020.10.036.


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

JOIV : International Journal on Informatics Visualization
ISSN 2549-9610  (print) | 2549-9904 (online)
Organized by Department of Information Technology - Politeknik Negeri Padang, and Institute of Visual Informatics - UKM and Soft Computing and Data Mining Centre - UTHM
W : http://joiv.org
E : joiv@pnp.ac.id, hidra@pnp.ac.id, rahmat@pnp.ac.id

View JOIV Stats

Creative Commons License is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.