The effect of external social media utilization on business performance of SMEs in Saudi Arabia: the mediating role of market orientation

Abstract

AbstractThe impact of social media (SM) on small and medium businesses (SMEs) has received less focus, and the literature is mixed. This study examines how external SM utilization (ESMU) affects the performance of Saudi SMEs. According to contingency theory, ESMU and market orientation (MO) are expected to affect business performance (BP), which include profitability and customer satisfaction. MO is expected to affect BP and mediates the effect of ESMU on BP. This study covers Saudi Arabian SMEs in Al-Riyadh. Random sampling is used. This study included 451 SME managers, directors, and owners. The results of Smart PLS 4 showed that ESMU affected positively business performance, profitability, customer satisfaction, and MO. MO also affected business performance, profitability and customer satisfaction and mediated partially the effect of ESMU on business performance, profitability and customer satisfaction. Having a high level of ESMU and MO is critical for improving the BP of SMEs. The usage of ESMU and its application can be a beneficial tools for SMEs in Saudi Arabia to improve their BP.

Keywords

• External social media utilization
• market orientation
• business performance
• customer satisfaction
• profitability
• SMEs