The role of customer orientation in enhancing the innovation capability and performance of Moroccan SMEs: A structural equation approach

Abstract

The academic literature provides substantial evidence that customer orientation and innovation capability directly enhance the performance of SMEs. However, there is a gap in understanding the potential synergies between customer orientation and innovation capability within SMEs. This paper aims to explore how these two variables interact to influence the overall performance of SMEs. To achieve this, a quantitative survey was conducted with 98 managers of Moroccan SMEs operating in diverse sectors, including manufacturing, services, and commerce. The collected data were analyzed in two steps. First, an exploratory factor analysis was performed using "SPSS" to identify the underlying dimensions of the studied variables. Then, a confirmatory analysis using partial least squares structural equation modeling (PLS-SEM) with "SmartPLS 4" was conducted to test the research hypotheses and validate the proposed relationships between the variables. The findings of this study revealed that the development of customer orientation positively and directly impacts the performance of Moroccan SMEs, enhancing their ability to meet customer needs and expectations more effectively. Additionally, innovation capability was found to partially mediate this relationship, indicating that customer orientation stimulates innovation, which in turn improves SME performance. These findings have important managerial and theoretical implications. They suggest that SME managers should invest in customer-centric strategies and encourage innovation within their organizations to improve performance. Furthermore, these results enrich our understanding of the dynamics between customer orientation, innovation, and SME performance, underscoring the importance of considering these two variables together to enhance SME performance.