The Role of Sales Network Quality in Transforming Proactive Market Orientation into Sales Performance: Evidence from MSMEs in Central Java, Indonesia

Abstract

This study aims to develop a novel concept of Sales Network Quality that explains the mechanism linking Proactive Market Orientation and Sales Performance among Micro, Small, and Medium Enterprises (MSMEs). Previous studies have predominantly examined the direct effect of market orientation on business performance, while limited attention has been given to the role of sales network quality in transforming proactive market capabilities into improved sales performance. Data were collected through a survey of 287 MSME owners or managers in Central Java, Indonesia, and analyzed using structural equation modelling-partial least squares (SEM-PLS). The results indicate that Proactive Market Orientation is positively associated with sales network quality and sales performance, whereas sales network quality is found to mediate the relationship between Proactive Market Orientation and Sales Performance. These findings demonstrate that sales network quality, developed through mutually beneficial cooperation, active participation, idea sharing, trust, and long-term relationships with partners, is an important relational resource for MSMEs. This study contributes to the advancement of Resource-Advantage Theory by highlighting that competitive advantage is derived not only from internal resources but also from the ability to develop and manage valuable external networks.