The Effect of Market Orientation as Mediator to Strategic Planning Practices and Performance Relationship: Evidence from Malaysian SMEs

AbstractThe aim of this research is t o examine direct relat ionship bet ween st rat egic planning pract ices and market orient at ion and the mediat ing effect of market orient at ion (MO) on the relationship between strategic planning practices (SPP) and SMEs” performance in Malaysia. It proposed a quantitative analysis in which market orientation and strategic planning pract ices are key success factors of SMEs. Data were collect ed by means of a mail survey quest ionnaire completed by owner/managers randomly selected from a sampling frame of regist ered SMEs. The integrated questionnaire was used to measure the strategic planning pract ices of firms using thirty four items developed from several authors and market orientation was measured using a nine item scale adapted from Narver & Slater (1990).Firms” performance measurement was based on subjective evaluation involving self-report ed measures.The findings reveal that significant relationships exist between strategic planning practices and performance, and also between market orientation and performance. While market orientation was found t o partially mediate the strategic planning practices and performance relationships. These findings may be of help to the owner/managers of SMEs to be more market oriented and practicing strategic planning in order for them to survive t he intensely in competitive market environment