Organizational learning, innovativeness and performance of financial service firms in an emerging market: examining the mediation effects of customer-focused strategy

Purpose The study investigates the extent to which organizational learning and innovativeness can improve the firms' performance through a customer-focused strategy. Design/methodology/approach Data were collected from Indonesian financial service firms using a questionnaire-based survey. The 157 useable survey responses were analysed to test the proposed hypotheses using SmartPLS. Findings This study finds that both organizational learning and innovativeness have a positive effect on performance. The effect of organizational learning on performance depends on the variations of the customer-focused strategy. However, innovativeness does not mediate through customer-focused strategy to enhance performance. Practical implications In firms that implement business model innovation, managers should focus on resource flexibility. Where it is responsive, managers need to be concerned with ensuring various uses of existing resources to understand the performance effectively. Social implications As one of the types of dynamic capabilities, organizational learning and innovativeness are also important antecedents of performance. Originality/value This study extends the business innovation model from the adaptability of customer-focused strategy. The findings confirm that organizational learning has a prominent role in meeting customer needs for a dynamic market.