THE EFFECT OF ENTREPRENEURSHIP ORIENTATION TOWARD MARKET ORIENTATION AND PERFORMANCE OF SONGKOK MSME IN GRESIK REGENCY

Purpose — This research aims to determine the effect of entrepreneurial orientation on market orientation, entrepreneurial orientation on the performance of MSMEs, and market orientation towards the performance of MSMEs. Design/methodology/approach — The object of this research is Songkok Micro Small and Medium Enterprises (MSME) in Gresik Regency. Findings — The results of this study indicate that entrepreneurial orientation has a significant effect on market orientation, entrepreneurial orientation has a significant effect on the performance of MSMEs, and market orientation has a significant effect on the performance of MSMEs. Practical Implications — The entrepreneurial movement plays a role in economic development in Indonesia. Although the number of entrepreneurs in Indonesia is still relatively low compared to other Southeast Asian countries, according to the 2015-2016 GEM Indonesia Report survey, the intention of entrepreneurship in Indonesia is high compared to Singapore, Thailand, Vietnam and Malaysia. Originality/value — This research uses a cluster sampling method involving 163 respondents and uses PLS (Partial Least Square) analysis tools with SmartPLS 3.0 software.


INTRODUCTION
The entrepreneurial movement plays a role in economic development in Indonesia, therefore efforts to support Micro, Small and Medium Enterprises (MSMEs) are strategies for developing entrepreneurship in Indonesia (Tambunan, 2006). According to BPS (2016), Indonesia only has 3.1% of entrepreneurial actors out of a total population of 252 people. The data shows that even though Indonesia has reached the ideal number, Indonesia still lags far behind compared to countries in Southeast Asia, namely Singapore 7%, Malaysia 5% and Thailand 4,5% and Vietnam 3,3% of the population of each country Indonesia ranked second after Philippines (www.gemconsortium.org/report).
To develop MSMEs, the improvement in the performance of MSMEs needs to be carried out through ongoing efforts from various institutions and ministries, as well as the banking sector, where coordination is carried out by the MSME ministry. Performance is an illustration of the achievement or achievement of the organization in a certain period. performance can also be defined as a measurement of a company's financial capabilities such as the level of profit, the level of investment with sales growth and profit. Performance can reflect the achievement of the company's financial goals and other objectives through the implementation of performance and strategy (Pramesti and Giantari, 2016).
Performance can also be influenced by entrepreneurial orientation and market orientation. Research on the effect of entrepreneurial orientation on market orientation was carried out by several researchers, namely Ruzgar, et al. (2014), Aljanabi and Noor (2015), andAmin, et al. (2016) andRauch, et al. (2009) Market orientation also affects performance, as stated by Kohli and Jaworski (1990), market orientation is a corporate culture that leads to improved performance. this is supported by the results of Amin, et al. (2016) andBeneke, et al. (2016) who found that market orientation had a significant positive effect on performance. According to Baker and Sinkula (2009), market-oriented companies will have a basis for faster improvements and will be reflected in new product success, productivity, market share, and sustainable competitive advantage.
In 2016 there were more than 1,425 large medium and small industries in Gresik Regency. International-class companies also joined in establishing the industry. The problems that are often faced by the songkok industry in Gresik Regency which are not yet fully explored include (1) lack of skilled workers due to the lack of interest of the younger generation to work in the songkok industry, (2) songkok industry is a hereditary company, so the owners lack entrepreneurial spirit, and (3) the majority of songkok industry owners still leave their products in stores, not market directly to the market. This causes the owner to get less information about the market. Thus further research is needed.

Entrepreneurship Orientation
Stevenson and Jarillo (1990) analogize the study of entrepreneurial orientation as a concept of entrepreneurial management, reflecting the processes, methods, and styles of organizations acting in entrepreneurship. Dess and Lumpkin (2005) state that companies that want to increase entrepreneurial success must be entrepreneurial oriented. According to Lumpkin and Dess (1996)  This effort can help to guarantee a high market share and will cause the company to have a good performance.
e. Autonomy, refers to independent actions of an individual or group or organization in bringing up an idea or vision and bringing it to completion.

Market orientation
Narver and Slater (1990) also define market orientation as the most effective and efficient organizational culture to create the behaviors needed to create superior value for consumers and produce superior performance for companies especially in a tight competitive environment. In this study, measuring market orientation with 4 (four) indicators (Kolar, 2006), namely: market intelligence, intelligence dissemination, intelligence responsiveness, and marketing culture. In this study, researchers used performance indicators according to Boso, Story, and Cadogan (2013), namely: sales performance and profitability. The growth in quantity of product sales is increasing and the growth in profits is calculated in the increasing nominal value of money (rupiah) and the increasing number of company assets, both fixed assets and non-fixed assets. H2 2. Entrepreneurship Orientation has a significant effect on MSME Performance 3. Market Orientation has a significant effect on MSME Performance

RESULTS AND DISCUSSION Research result
In the PLS analysis there are two tests namely the outer model and inner model. The test results of the outer model in this study are as follows: 1. Convergent validity, aims to determine the validity between indicators and their latent variables. According to Ghazali (2006), the convergent value of validity is said to be sufficient, if the loading value is 0.5 to 0.6. Convergent validity will be explained in Table 1. The table above shows that all items used in this study are valid because they have a loading value above 0.5. 2. Discriminant validity, functions as proof that latent constructs predict the size of their blocks better than other blocks (Ghazali, 2014). The discriminant validity of this study will be explained as follows. 3. Composite reliability, a variable said to be reliable if the AVE value is greater than 0.5, the composite reliability value and Cronbach alpha a construct is declared reliable if the composite reliability and cronbach alpha are above 0.70. The composite reliability and cronbach alpha results are as follows: The values in Table 3 show that all variables are said to be reliable with values greater than 0.5 and the cronbach alpha values above 0.7. Testing the inner model in this study is shown as follows: 1. R-Square (R 2 ): The R-Square VALUE obtained from this study will be shown in the following From testing the hypothesis it is known that all research hypotheses are accepted because they have a p-value below 0.05, which means that all variables have a significant effect.

Effect of entrepreneurial orientation on market orientation
Entrepreneurial orientation has a significant positive effect on market orientation with a correlation coefficient of 0.848 or 84.8%, which means that when the entrepreneurial orientation variable is increased once, the market orientation variable will increase by 84.8%.
The results of this study support the results of previous studies conducted by Amin, et al. (2016). Which states that there is a strong influence between entrepreneurial orientation on market orientation. The results of this study also support the concept put forward by Naver and Slater (1996), namely entrepreneurial orientation can increase prospects for developing products or identifying underserved market segments, both of which are opportunities to develop competitive competitiveness. In addition, market-oriented companies will encourage innovative companies that are able to create new product concepts that refer to market needs. Likewise with companies that are proactive in identifying and responding to competitors quickly, thus giving the best impact on a market orientation culture. 2. Effect of entrepreneurial orientation on the performance of MSMEs Entrepreneurial orientation has a significant positive effect on the performance of MSMEs with a correlation coefficient of 0.362 or 36.2%, which means that when the entrepreneurial orientation variable is increased once, the variable performance of MSMEs will increase by 36.2%.
The results of this study support the results of previous studies conducted by Ruzgar, et al. (2014), Amin, et al. (2016), Asad, et al. (2016), and Lee and Chu (2017 which state that the influence of entrepreneurial orientation on performance is significantly positive. The results of this study are also in line with the concept proposed by Lumpkin and Dess (1996) which states that companies that want to increase their entrepreneurial success must be entrepreneurial oriented. Further explained that companies with entrepreneurial orientation will become more innovative, where companies have the ability and are willing to support creativity, new ideas, and experiments that produce new products or services.

Effect of market orientation on the performance of MSMEs
Market orientation has a significant positive effect on the performance of MSMEs with a correlation coefficient of 0.554 or 55.4%, which means that when the market orientation variable is increased once, the variable performance of MSMEs will increase by 55.4%.
The results of this study support the results of previous studies conducted by Amin, et al. (2016) andBeneke, et al. (2016) who found that market orientation had a significant positive effect on performance. The results of this study are also in line with the concept proposed by Kohli and Jaworski (1993) which states that market orientation is the result of developing a marketing concept consisting of customer focus, coordinated marketing and profitability. Of the three things, customer focus and coordinated marketing are the things that underlie market orientation, while profitability is a consequence.

CONCLUSION
Based on the results of the research described in the previous chapter, the conclusions produced are as follows:

Vol. 28, No. 2 August 2020 © Centre for Indonesian Accounting and Management Research Postgraduate Program, Brawijaya University
Entrepreneurial orientation has a significant positive effect on market orientation in Songkok MSMEs in Gresik Regency. The higher the entrepreneurial orientation of a company, the higher the market orientation. Likewise, if the entrepreneurial orientation is low, the market orientation is also low.
Entrepreneurial orientation has a significant positive effect on the performance of Songkok MSMEs in Gresik Regency. The higher the entrepreneurial orientation, the higher the performance of MSMEs.Vice versa, the lower the entrepreneurial orientation, the lower the performance of MSMEs.
Market orientation has a significant positive effect on the performance of Songkok MSMEs in Gresik Regency. The higher the market orientation, the higher the performance of MSMEs.Vice versa, the lower the market orientation, the lower the performance of MSMEs.

Limitation
This research was conducted in one place, namely the district of Gresik, East Java and this study focused on one MSME sector only, the SMSE's of songkok, therefore the result of this study might be different if examined in other cities and other sectors.

Thanks to
Thank you too DinasKoperasi, Perindustrian, Perdagangandan UMKM Gresik Regency which has helped provide business identity and MSME data, and thanks to Songkok Micro and Small Medium Enterprises in Gresik Regency.
Entrepreneurial orientation has a significant positive effect on the performance of Songkok MSMEs in Gresik Regency. The higher the entrepreneurial orientation, the higher the performance of MSMEs. Vice versa, the lower the entrepreneurial orientation, the lower the performance of MSMEs.
Market orientation has a significant positive effect on the performance of Songkok MSMEs in Gresik Regency. The higher the market orientation, the higher the performance of MSMEs. Vice versa, the lower the market orientation, the lower the performance of MSMEs.