Organizational Capabilities, Competitiveness and Business Performance of Mara Digital in Malaysia

Abstract

MARA Digital's business performance (BP) since its inception in 2015 has been found to be unsatisfactory. This paper aims to determine whether competitiveness and organizational capabilities (OC) have an impact on BP. Empirical data were collected from 310 ICT retailers under Majlis Amanah Rakyat (MARA) and relevant hypotheses were tested using structural equation modelling (SMART PLS software). Findings indicate that OC has a direct and positive influence on BP. However, findings for competitiveness, which acts as a moderator in the relationship between OC and BP, were ambiguous. This study contributes to the theoretical understanding of the relations between OC and BP in start-up companies. The significant role played by OC is the most impactful factor in this study. Firms should understand how different resources and marketing strategies (price, place and promotion) affect their BP. In addition, improving BP that cultivates competitiveness through active acceptance of new technologies and an open mindset towards novel technical skills can directly enhance BP. MARA will benefit from this study through the promotion strategy and its implementation since the current promotion strategy was found to negatively affect business performance. MARA could increase its promotion budget as part of a more effective strategy. In other words, to maintain competitive advantage and be successful, start-up firms need to develop OC and use their physical, human and organizational assets, both tangible and intangible, towards this objective.