Structural Equation Model Of Market Orientation And Supply Chain Management On The Effectiveness Of Thai Small And Medium-Sized Enterprises
By 2020, the Association of Southeast Asian Nations will have a combined USD $4.7 trillion economy and according to the Bank of Thailand, Thailand has nearly 3 million Small to Medium-Sized Enterprises within this economic block. This constitutes about 99.6 per cent of all enterprises in the kingdom, employing 78 percent of the labor force. Given these staggering statistics, researchers undertook a study combining both quantitative and qualitative techniques to research how 127 award winning enterprises’ Effectiveness were influenced by both Supply Chain Management and Market Orientation. Statistical analysis was conducted by use of a Structural Equation Model using PLS-Graph software. Convergent validity was investigated by identifying whether each indicator’s loading on its posited construct was greater than twice its standard error, which in each case had a factor loading of over .707, with a statistical significance of (| t | ≥ 1.96). The findings showed enterprise effectiveness was influenced positively, both directly and indirectly by the variables. Market Orientation consisted of the observed variables Intelligence Generation, Intelligence Dissemination and Responsiveness, which all influenced the organizational Effectiveness. Supply Chain Management variables consisted of Collaboration, Trust, Commitment, and Communication, which all had an effect organizational effectiveness. Suggestions from the research include enterprises have to manage marketing knowledge as well as the dissemination of knowledge to organizational staff. Customer response knowledge and capability is crucial as well. There must also be enterprise interoperability, allowing trust and teamwork, which creates an environment for success. Marketing policies need to create strong networks and build good customer relationships. Managers need to be educated on how to be team leaders while developing a clear understanding of organizational communication processes.
Keywords- Market Orientation, Organizational Effectiveness, Small and Medium-Sized Enterprises, Supply Chain Management.