Exploring the Role of Artificial Intelligence, Business Agility, and Business Model Innovation in Enhancing Culinary MSMEs Performance
DOI:
https://doi.org/10.20414/jed.v7i3.14368Keywords:
Artificial Intelligence, Business Model, Innovation, Business AgilityAbstract
Purpose: This study aims to identify the factors influencing the performance of Micro, Small, and Medium Enterprises (MSMEs) in the culinary sector, with a particular focus on their capabilities in artificial intelligence (AI). The research examines business model innovation as a mediating factor and business agility as a moderating factor.
Method: The research was conducted in Medan, targeting culinary entrepreneurs with a sample size of 165 respondents. Hypothesis testing was performed using PLS-SEM.
Result: The results indicate that AI capabilities and business model innovation have a positive and significant impact on the business performance of culinary MSMEs in Medan. Mediation analysis reveals that business model innovation effectively mediates the relationship between AI capabilities and the performance of culinary MSMEs. However, moderation analysis shows that business agility does not strengthen the impact of AI capabilities and business model innovation on business performance.
Practical Implications for Economic Growth and Development: This study emphasizes the significance of artificial intelligence, business agility, and business model innovation in enhancing the performance of MSMEs within the culinary sector. Adopting AI, improving business agility, and promoting business model innovation can enhance MSMEs' performance and contribute to digital economic growth.
Originality/Value: This study evaluates AI capacity through mediation and moderation approaches based on the Resource-Based View (RBV) theory. It explores how AI capabilities, business agility, and business model innovation can improve MSME performance, an area that remains underexplored in developing countries such as Indonesia.
Downloads
References
Abdelwahed, N. A. A., Al Doghan, M. A., & Soomro, B. A. (2023). Business strategy and firm performance in SMEs: Recognizing the role of the environmental management process. Corporate and Business Strategy Review, 4(4 Special Issue), 381–390. https://doi.org/10.22495/cbsrv4i4siart18
Adhiat, A. (2022). Sektor UMKM yang memfaatkan digitalisasi. Databoks. https://databoks.katadata.co.id/teknologi-telekomunikasi/statistik/f37a159e162724f/ini-sektor-umkm-yang-banyak-manfaatkan-teknologi-digital
Ahmed, A., Bhatti, S., Golgeci, I., & Arslan, A. (2022). Digital platform capability and organizational agility of emerging market manufacturing SMEs: Mediating role of intellectual capital and the moderating role of environmental dynamism. https://doi.org/10.1016/j.techfore.2022.121513
Alshawaaf, N., & Lee, S. H. (2020). Business model innovation through digitization in social purpose organizations: A comparative analysis of Tate Modern and Pompidou Centre. Journal of Business Research, 125, 1–9. https://doi.org/10.1016/j.jbusres.2020.02.045
Amit, R., & Zott, C. (2010). Business model innovation: Creating value in times of change. SSRN Electronic Journal, 23. https://doi.org/10.2139/ssrn.1701660
Ashaari, M. A., Amran, A., Singh, K., & Singh, D. (2020). Big data analytics capability for improved performance of higher education institutions in the era of IR 4.0: A proposed conceptual framework. Technological Forecasting and Social Change, 13. https://doi.org/10.1016/j.techfore.2021.121119
Aspara, J., Hietanen, J., & Tikkanen, H. (2010). Business model innovation vs replication: Financial performance implications of strategic emphases. Journal of Strategic Marketing, 18, 39–56. https://doi.org/10.1080/09652540903511290
Åström, J., Reim, W., & Parida, V. (2022). Value creation and value capture for AI business model innovation: A three-phase process framework. Review of Managerial Science, 16(7), 2111–2133. https://doi.org/10.1007/s11846-022-00521-z
Aweidah, D. R. M. (2024). The impact of artificial intelligence on organizational agility in industrial companies: The moderating role of dynamic capabilities. Pakistan Journal of Life and Social Sciences, 22(2), 8834–8849. https://doi.org/10.57239/PJLSS-2024-22.2.00667
Ayadi, F. M., Alaskar, T. H., & Aloulou, W. J. (2024). From digital platform capabilities to firm performance: A mediation approach based on firm agility and network capabilities. International Journal of Consumer Relationship Management, 15(1), 1–24. https://doi.org/10.4018/IJCRMM.338997
Badghish, S., & Soomro, Y. A. (2024). Artificial intelligence adoption by SMEs to achieve sustainable business performance: Application of the technology–organization–environment framework. Sustainability, 16(5), 1864. https://doi.org/10.3390/su16051864
Bai, B., Um, K.-H., & Lee, H. (2022). The strategic role of firm agility in the relationship between IT capability and firm performance under the COVID-19 outbreak. Journal of Business & Industrial Marketing, 38. https://doi.org/10.1108/JBIM-08-2021-0406
Baškarada, S., & Koronios, A. (2018). The 5S organizational agility framework: A dynamic capabilities perspective. International Journal of Organizational Analysis, 26(2), 331–342. https://doi.org/10.1108/IJOA-05-2017-1163
Bhatti, S. H., Ahmed, A., Ferraris, A., Hirwani Wan Hussain, W. M., & Wamba, S. F. (2022). Big data analytics capabilities and MSME innovation and performance: A double mediation model of digital platform and network capabilities. Annals of Operations Research. https://doi.org/10.1007/s10479-022-05002-w
Bhatti, S. H., Santoro, G., Khan, J., & Rizzato, F. (2021). Antecedents and consequences of business model innovation in the IT industry. Journal of Business Research, 123(March), 389–400. https://doi.org/10.1016/j.jbusres.2020.10.003
Chatterjee, S., Rana, N., Tamilmani, K., & Sharma, A. (2021). The effect of AI-based CRM on organization performance and competitive advantage: An empirical analysis in the B2B context. Industrial Marketing Management, 97, 205–219. https://doi.org/10.1016/j.indmarman.2021.07.013
Chen, D., & Esperança, J. P. (2022). The impact of artificial intelligence on firm performance: An application of the resource-based view to e-commerce firms. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.884830
Deeb, M., Wahab, A., & Radmehr, M. (2024). The impact of AI assimilation on firm performance in small and medium-sized enterprises: A moderated multi-mediation model. Heliyon, 10(8), e29580. https://doi.org/10.1016/j.heliyon.2024.e29580
Hasan, M., Sharif, J. B., & Michael, D. L. (2024). Maximizing business performance through artificial intelligence. International Journal of Computer Applications, 492(24), 252–265. https://doi.org/10.5120/ijca2024924252
Herciu, M. (2017). Drivers of firm performance: Exploring quantitative and qualitative approaches. Studies in Business and Economics, 12(1), 79–84. https://doi.org/10.1515/sbe-2017-0006
Jorzik, P., Klein, S. P., Kanbach, D. K., & Kraus, S. (2024). AI-driven business model innovation: A systematic review and research agenda. Journal of Business Research, 182(February), 114764. https://doi.org/10.1016/j.jbusres.2024.114764
Khalil, L., Aziz, N., Ariffin, A. A., & Ngah, A. (2023). Big data analytics capability and firm performance in the hotel industry: The mediating role of organizational agility. Wseas Transactions on Business and Economics, 20, 440–453. https://doi.org/10.37394/23207.2023.20.40
Khaq, Z. D., Subroto, V. K., & Susanto, E. (2024). AI-driven strategies for enhancing MSME sales and business sustainability in the digital era. Journal of Management Innovation, 3(2), 180–194. https://doi.org/10.51903/jmi.v3i2.28
Latifi, M. A., & Bouwman, H. (2018). Business model innovation and firm performance: The role of mediation and moderation factors. 31st Bled EConference: Digital Transformation: Meeting the Challenges, BLED 2018, June, 67–84. https://doi.org/10.18690/978-961-286-170-4.5
Lee, J., Suh, T., Roy, D., & Baucus, M. (2019). Emerging technology and business model innovation: The case of artificial intelligence. Journal of Open Innovation: Technology, Market, and Complexity, 5(3). https://doi.org/10.3390/joitmc5030044
Leone, D., Pietronudo, M. C., Gabteni, H., & Carli, M. R. (2023). Reward-based crowdfunding for building a valuable circular business model. Journal of Business Research, 157, 113562. https://doi.org/10.1016/j.jbusres.2022.113562
Likai, Z., & Ruoyu, L. U. (2022). The impact of network ties on SMEs' business model innovation and enterprise growth: Evidence from China. IEEE Access, 10, 29846–29858. https://doi.org/10.1109/ACCESS.2022.3158749
Liu, L., Cui, L., Han, Q., & Zhang, C. (2024). The impact of digital capabilities and dynamic capabilities on business model innovation: The moderating effect of organizational inertia. Sustainability, 1(1–10). https://doi.org/10.1057/s41599-024-02910-z
Liu, L., Long, J., Fan, Q., Wan, W., & Liu, R. (2022). Examining the functionality of digital platform capability in driving B2B firm performance: Evidence from emerging markets. Journal of Business & Industrial Marketing, 38. https://doi.org/10.1108/JBIM-09-2021-0441
Lu, Y., & Ramamurthy, K. (2011). Understanding the link between information technology capability and organizational agility: An empirical examination. MIS Quarterly, 35, 931–954. https://doi.org/10.2307/41409967
Mikalef, P., & Gupta, M. (2021). Artificial intelligence capability: Conceptualization, measurement calibration, and empirical study on its impact on organizational creativity and firm performance. Information & Management, 58(3), 103434. https://doi.org/10.1016/j.im.2021.103434
Mrugalska, B., & Ahmed, J. (2021). Organizational agility in Industry 4.0: A systematic literature review. Sustainability, 13(8272), 1–23. https://doi.org/10.3390/su13158272
Oldemeyer, L., Jede, A., & Teuteberg, F. (2024). Investigation of artificial intelligence in SMEs: A systematic review of the state of the art and the main implementation challenges. Management Review Quarterly. https://doi.org/10.1007/s11301-024-00405-4
Pedersen, E., Gwozdz, W., & Hvass, K. K. (2018). Exploring the relationship between business model innovation, corporate sustainability, and organizational values within the fashion industry. Journal of Business Ethics, 149, 1–15. https://doi.org/10.1007/s10551-016-3044-7
Rehman, S. U., Elrehail, H., Alshwayat, D., Ibrahim, B., & Alami, R. (2023). Linking hotel environmental management initiatives and sustainable hotel performance through employees’ eco-friendly behavior and environmental strategies: A moderated-mediated model. European Business Review, 35(2), 184–201. https://doi.org/10.1108/EBR-05-2022-0094
Salfore, N., Ensermu, M., & Kinde, Z. (2023). Business model innovation and firm performance: Evidence from manufacturing SMEs. Heliyon, 9(6), e16384. https://doi.org/10.1016/j.heliyon.2023.e16384
Sharma, P., Shah, J., & Patel, R. (2022). Artificial intelligence framework for MSME sectors with focus on design and manufacturing industries. Materials Today: Proceedings, 62. https://doi.org/10.1016/j.matpr.2021.12.360
Singh, S., Darwish, T. K., & Poto?nik, K. (2016). Measuring organizational performance: A case for subjective measures. British Journal of Management, 27(1), 214–224. https://doi.org/10.1111/1467-8551.12126
Spallone, R. M. B. (2024). G7 report on driving factors and challenges of AI adoption and development among companies, especially micro and small. MIMIT. https://www.mimit.gov.it/en/media-tools/news/g7-industry-and-technology-ministers-convene-in-rome-to-advance-industrial-competitiveness-digital-innovation-sustainable-digital-transformation
Thayyib, P. V., Mamilla, R., Khan, M., Fatima, H., Asim, M., Anwar, I., Shamsudheen, M. K., & Khan, M. A. (2023). State-of-the-art of artificial intelligence and big data analytics reviews in five different domains: A bibliometric summary. Sustainability, 15(5). https://doi.org/10.3390/su15054026
Trocin, C., Hovland, I. V., Mikalef, P., & Dremel, C. (2021). How artificial intelligence affords digital innovation: A cross-case analysis of Scandinavian companies. Technological Forecasting and Social Change, 173, 121081. https://doi.org/10.1016/j.techfore.2021.121081
Wang, N., Wan, J., Ma, Z., Zhou, Y., & Chen, J. (2023). How digital platform capabilities improve sustainable innovation performance of firms: The mediating role of open innovation. Journal of Business Research, 167, 114080. https://doi.org/10.1016/j.jbusres.2023.114080
Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long Range Planning, 49(1), 36–54. https://doi.org/10.1016/j.lrp.2015.04.001
Yasmin, M., Tatoglu, E., K?l?ç, H. S., Zaim, S., & Delen, D. (2020). Big data analytics capabilities and firm performance: An integrated MCDM approach. Journal of Business Research, 114, 1–15. https://doi.org/10.1016/j.jbusres.2020.03.028
Yu, F., Jiang, D., Zhang, Y., & Du, H. (2021). Enterprise digitalization and financial performance: The moderating role of dynamic capability. Technology Analysis & Strategic Management, 35, 1–17. https://doi.org/10.1080/09537325.2021.1980211
Zheng, N. N., Liu, Z. Y., Ren, P. J., Ma, Y. Q., Chen, S. T., Yu, S. Y., Xue, J. R., Chen, B. D., & Wang, F. Y. (2017). Hybrid-augmented intelligence: Collaboration and cognition. Frontiers of Information Technology and Electronic Engineering, 18(2), 153–179. https://doi.org/10.1631/FITEE.1700053
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Romindo Megawati Pasaribu, Hanna Meilani Damanik, Trimelda Mei Liana Sitorus
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
