The Effect of Organizational Capability, Market Orientation, and IT Adoption on Creative Industry Business Performance

Background: The creative industry, particularly the batik sector, is known to play an essential role in the development of Indonesia's national economy. Despite its inherent value, the sector has experienced a decline in business performance, primarily attributed to challenges in competing with foreign products. Therefore, this study aimed to analyze the effect of organizational capability, market orientation, and information technology (IT) adoption on business performance of the creative industry in Central Java, Indonesia. Methods: A quantitative method was used in this study, and the sample population comprised 200 batik businesses in Semarang, Surakarta, and Pekalongan Cities. Furthermore, data collection was carried out through questionnaires and Google Forms with purposive sampling. The selected data were then analyzed using the Partial Least Square Structural Equation Model (PLS-SEM). Results: The results showed that organizational capability, market orientation, and IT adoption had a significant effect on business performance. Furthermore, IT adoption was identified as a dominant factor in increasing the performance of the creative industry. Conclusion: The results obtained contributed to enriching the development of the resource-based view (RBV) and technology acceptance model (TAM) theories. Some practical implications were also proposed, which allowed the creative industry to develop business by considering the results obtained.