The impact of exploitative and organizational learnings on SMEs’ performance: The role of environmental dynamism

Within these dynamics and disruptive eras, it is crucial for all kinds of organization to build and ensure their competencies in increasing their performance and maintaining their position, including for SMEs. This study aims to identify the role of exploitative and organizational learning in influencing SMEs' performance. It also considers the moderating role of environmental dynamism as the conditional factor that underlies the relationship. We carried out the study on 150 SMEs in Jakarta, Indonesia, which was chosen using purposive sampling. The data is collected by distributing an online questionnaire to the respondents, which is then processed and analyzed using Structural Equation Modeling with AMOS. The results of this study indicate that exploitative learning and organizational learning lead to higher SME performance. Furthermore, this influence is more potent when SMEs exist within a dynamic environment, as they will feel the necessity to learn more to face the challenges and seize the opportunities. © 2023 by the authors. Licensee SSBFNET, Istanbul, Turkey. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (


Introduction
Small and medium enterprises (SMEs) are very important for the economic development of countries, whether developed or developing countries. For developing countries, SMEs contribute around 45 percent of state income from total employment (Sofia et al., 2022;Johan et al., 2022). When considering informal businesses in both developed and developing countries, SMEs contribute to more than 50 percent of job creation (Fraccastoro et al., 2021). Similarly, in Europe, SMEs make up 99 per cent of all businesses, and provide 85 per cent of new jobs (European Commission, 2019). Thus, there has been a lot of attention on the macro-and microeconomic dominance of SME success. Academics have also donated their quotas, by conducting research on various determinants of the current success of SME businesses (Ssenyonga, 2021). The current study also expands knowledge, by assessing how organizational learning can affect SME performance (Lita & Faisal, 2018;Oh & Kim, 2022). According to Oh & Kim (2022), organizational learning and business performance is a field of study that is concerned with how organizations can maximize their performance and profits. This covers a wide range of topics such as management, leadership, business strategy, marketing, finance, and others. Al-Jabri & Al-Busaidi (2020) stated that business success lies in products or services that are well received by consumers. However, when environmental changes are quite massive, many SMEs do not pay enough attention to what consumers actually want (Oh & Kim, 2022). This encourages business people to apply processes to new learning (Al-Jabri & Al-Busaidi, 2020; Ngammoh et al., 2021;Yusoff et al., 2019) In order to improve business performance, it is important for organizations to continuously learn and develop themselves (González-Varona et al., 2021;Scipioni et al., 2021). This includes studying industry trends, attending training and gathering relevant information regarding business changes that are occurring. By doing this, organizations can ensure that they are always ready to face new business challenges and continuously improve their performance (Bika & Kalantaridis, 2019;Herbane, 2019). Given that the growth of SMEs is getting higher, it is increasingly important to find ways to improve their performance so that SME business people can have high competitiveness. According to Fu et al. (2021) the external environment, which includes economic, social, political, technological, and natural environmental factors, can affect business performance. These factors can provide challenges and opportunities for companies in achieving organizational goals (Jaya et al., 2021).
In the economic context, economic fluctuations can have an impact on business performance. For example, when the economy is down, business organizations may face reduced demand and sales. Conversely, when the economy is developing, companies may face increased demand and sales (Lamazi et al., 2020). Therefore, companies need to pay attention to external factors in making business decisions, such as pricing and inventory management where this cannot be realized if the organization does not apply learning practices (Qalati et al., 2021). In order to achieve good business performance, companies must pay attention to these external environmental factors and consider how these factors can affect their performance and make wise and responsible business decisions. In the context of SMEs, organizational learning can help improve their ability to face business challenges and take advantage of available opportunities (González-Varona et al., 2021). According to Tian et al. (2021), organizational learning can be done through various means, including training, mentoring, and professional development. Training can help SME employees to develop new skills and improve their performance (Selvarajah et al., 2019). Mentoring can help employees gain insight and experience from more experienced seniors. In addition, SMEs can take advantage of technology to help improve their business performance. Technologies such as applications, e-commerce platforms, and business management systems can help companies increase efficiency, reduce costs, and expand their market reach. It is important for SMEs to consider organizational learning as a strategy to improve their business performance (Sawaean & Ali, 2020). This can help them to develop their people, improve processes, and make effective use of technology. As a result, this can help SMEs to achieve long-term growth and success.
This study contributes to the extant literature by looking at how exploitative learning and organizational learning can improve business performance. However, this study also follows the advice of Belhadi et al. (2022) that it is necessary to have variables that can strengthen the influence of these two variables in improving business performance, especially in the context of SMEs, where growth is currently increasing. Environmental dynamism is used in this study as a moderating variable to determine the effect of exploitative learning and organizational learning on improving the performance of SMEs, especially in the city of Jakarta, Indonesia.

Literature Review Exploitative Learning
Acquiring current skills and knowledge in business processes and innovation is a major focus on exploitative learning (Bashir et al., 2023;Zhang et al., 2023). According to Bashir et al. (2023) exploitative learning encourages organizations to be oriented towards innovation which results in organizational performance. During the exploitation phase, learning and experience become very important in improving organizational performance. As mentioned by Zhang et al. (2023), competency in exploitative learning is based on an organization's investment in expanding and perfecting current organizational innovation processes, skills, and knowledge. Exploitative learning allows companies to sharpen their existing capabilities to innovate products that are competitively profitable in short-term market conditions (Ali et al., 2022;Donbesuur et al., 2023). It emphasizes the synchronization of technological knowledge and market demand in the development of goods and services, based on the organization's previous experience. The level of use of received knowledge can increase the absorption of knowledge for innovation and organizational performance and increase the productivity and efficiency of business operations, especially in the context of SMEs (Wang & Zhang, 2020;Zhong & Chen, 2022). Previous research has shown that exploitative learning leads to unique SME product innovation (Chen et al., 2020;Liu et al., 2021), because ideas cannot be imitated by outsiders. Thus, the success of organizational performance is significantly influenced by optimizing existing knowledge in a stable business environment (Liu et al., 2019;Shafique et al., 2021). According to Tian et al. (2021), exploitative learning is also more effective when a business has limited time to produce new items and so requires it to use existing knowledge to improve its business performance.The success of exploitative learning depends on the availability of exploitable capabilities, assets, or resources in the organization, which are under the organization's internal control (Ojha et al., 2018). Exploitative learning requires organizations to reduce usage costs in operational processes (Ojha et al., 2018). Ali et al. (2022) stated that exploitation is associated with operational efficiency and can increase understanding of existing knowledge through various combinations of information obtained from the external environment (Belhadi et al., 2022). In addition, the importance of exploitation learning itself can improve decision making, implementation and control so as to reduce errors, reduce time and can increase efficiency in product development. Exploitative learning can help organizations effectively respond to environmental dynamics by adapting technology as a basis for improving business performance. Previous research conducted by Bashir et al. (2023) found that exploitative learning has a correlation in improving business performance. Thus, the first hypothesis is proposed as follows: H1. Exploitative learning has a significant positive effect on the performance of SMEs

Organizational Learning and SMEs' Performance
Organizational learning is a process by which an organization improves its performance by gaining knowledge and experience through its operations and activities (Hooi, 2021). It involves acquiring, sharing and using knowledge to make decisions, solve problems and create new ideas and practices. Organizational learning can occur at different levels within an organization, including individual, team, and organizational levels (Al-Jabri & Al-Busaidi, 2020; Yusoff et al., 2019). It can be formal, such as through a training program or research project, or informal, such as through trial and error, feedback, and reflection. The goal of organizational learning is to create a culture of continuous improvement and innovation, where employees are encouraged to learn and develop new skills, and where knowledge is shared and used to achieve organizational goals (Hindasah & Nuryakin, 2020;Scipioni et al., 2021). Effective organizational learning can lead to increased productivity, better decision making and a competitive advantage in the marketplace. According to Zhang et al. (2023), learning can be at the organizational, group or individual level. Oh (2019) stated that learning at the organizational level leads to two aspects. The first is that new learning emerges from old or new knowledge (Al-Jabri & Al-Busaidi, 2020). Second, focusing on the use of old or new knowledge itself, and not activities in producing knowledge (Jeong & Shin, 2019;Kim & Park, 2020;Tian et al., 2020). According to KBV theory, organizations acquire, process, and use their knowledge to improve performance (Grant, 1996). KBV argues that knowledge is an important asset, and organizational learning is essential for exploring new knowledge and building competitive advantage (Belinski et al., 2020). Organizational learning refers to a process of social interaction in which knowledge is continuously generated, interpreted, integrated and applied to meet corporate targets or adapt to changing environments. Organizational learning is generally considered as preparation for organizational change in improving business performance. Bilan et al. (2020) stated that organizational learning has a role in integrating existing knowledge in improving organizational performance. as stated by Tu (2021) learning is classified as an exploitative or exploratory. As stated by Bilan et al. (2020), learning is usually classified as exploitative or exploratory. Exploitation is oriented towards reducing variation, maintaining stability, and pursuing efficiency; while exploration is oriented towards experimentation and transformation. Organizational learning involves all elements in the organization to improve performance. Oh (2019) stated that organizational learning aims to encourage the absorption and transformation of knowledge by increasing responsiveness to the external environment thereby contributing to increased performance (Brix, 2019). Therefore, incorporating organizational learning into research on the effects of green innovation on firm competitive advantage can help refine internal transmission processes, which have been generally neglected in previous research. Based on this, the second hypothesis is proposed as follows: H2. Organizational learning has a significant positive effect on Sme's performance

Environmental Dynamism as Moderator
According to Taleb & Raju (2020), environmental dynamism refers to the level of change and uncertainty in the external environment of an organization. This uncertainty includes factors such as technological advances, economic conditions, political changes, social trends, and natural disasters (Andrade et al., 2021). A highly dynamic environment is characterized by rapid and unpredictable changes, while a stable environment experiences little change from time to time (Paudel, 2019). The fast changes taking place in the market and intense business competition are making things difficult for organizations. An organization must be proactive not only in detecting environmental signals but also seize opportunities immediately to be successful. Ali et al. (2020) argues that a company, to be successful, must continuously scan its environment to adapt to it. Environmental uncertainty has a negative impact on organizations, especially on cash flow, return on investment, and market share. However, when an organization is able to align with environmental changes it will have a positive impact on the performance of the organization itself (Oh & Kim, 2022). Organizations operating in highly dynamic environments must be adaptable and flexible in order to survive and thrive. They must be able to quickly respond to changes in the external environment by adapting their strategy and operations to remain competitive. In contrast, organizations operating in stable environments may have more time to plan and implement their strategies, but may run the risk of becoming complacent and failing to innovate. Popa et al. (2022) stated that organizational learning can improve performance if the organization is able to respond to any changes in its external environment. Environmental dynamism is an important factor to consider when analyzing an organization's competitive landscape and developing strategies for long-term success (Shafique et al., 2021). By understanding the level of dynamism in the external environment, organizations can make informed decisions about how to allocate resources and adapt to changing conditions. However, environmental scanning alone will not lead to better performance without learning from the organization. Ali et al. (2020) added that organizations need to adapt to changes in the environment but information and knowledge are needed. Thus the third hypothesis is proposed as follows: H3. Environmental dynamism moderates the relation of exploitative learning to sme's performance H4. Environmental dynamism moderates the relationship between organizational learning and sme's performance

Methods and Variable Measurements
This research was conducted using a quantitative approach designed to test and determine the causal effect between the variables studied. The population of this study is SMEs in the city of Jakarta, DKI Province. The determination of the sample was carried out using a purposive sampling technique, with the criteria of SMEs engaged in creative crafts having been running their business for at least 1 year. This is to ensure that SMEs have experienced the dynamics of environmental change in the organizations where they operate, so that they can understand the role of exploitative learning and organizational learning in improving the performance of SMEs. 150 respondents were selected in this study. In addition, this study also uses the environmental dynamics variable as a moderator. Data collection was carried out by distributing online questionnaires to respondents. The questionnaire was measured using a 5-point Likert scale, with a scale of 1 indicating the respondent strongly disagreed, and a scale of 5 indicating the respondent strongly agreed. Furthermore, the data analysis process was carried out by SEM with AMOS.
Variable measurements regarding exploitative learning are measured by five items adopted from Li & Huang (2013). Organizational learning is measured by four items adopted from Soto-Acosta et al. (2018). Environmental dynamism is measured by four items adopted from Chan et al. (2016) and Li et al. (2020), and finally SME performance is measured by four items adopted from Bamfo & Kraa (2019).

Results and Discussion
Of the 150 SME owners in the city of Jakarta, DKI Province, 113 SME have been doing business for more than 5 years, and 37 SME have been doing business for less than 5 years. For the size of SMEs which are measured based on the number of employees, 74 SMEs have 50 to 100 employees, 15 SMEs have 100 to 120 employees and 61 SMEs have employees less than 50 people. Then to test the proposed hypothesis, this study uses the SEM approach with the help of AMOS software which is recognized as a suitable analytical technique for theory development and testing.

Data Reliability Test
The results of the standard loading estimation significance test on the measurement model obtained objective information that all indicators contained in the latent variable showed a very significant value with p <0.001 and the value of each loading on the indicator was greater than 0.50. With results like these, all indicators can be said to be valid in measuring latent variables. Then the reliability test of Cronbach's Alpha (α) was calculated using the SPSS version 23 program, with acceptance parameters > 0.70. Meanwhile, Construct Reliability (CR) and Average Variance Extracted (AVE) were calculated manually. The Construct Reliability (CR) parameter must have a value greater than 0.7 so that the indicator can be said to be reliable for measuring latent variables. The recommended value for the Average Variance Extracted (AVE) parameter must exceed 0.5. From the results of data processing the parameters Cronbach's Alpha, Construct Reliability (CR) and Average Variance Extracted (AVE) meet the acceptance criteria, so that the indicators used can be declared reliable.

Model Fit Test
The parameters used in testing the fit model are Chi-Square, CMIN/DF, AGFI, RMSEA, TLI and CFI. A good model shows that the measurement model in research is in accordance with the empirical situation in the population activity. The results of the model suitability test in this study can be seen in Table 2.

Convergent Validity Test
This test was conducted to determine the validity of each estimated indicator, by measuring the dimensions of the concept tested in the study. If each indicator has a critical ratio (C.R.) value that is greater than twice the standard error (S.E.), it means that a set of indicators can represent one latent variable that underlies the latent variable. From the test results, the regression weight values show that the critical ratio (C.R.) is greater than twice the standard error (S.E.), which means that all indicators in the study are valid for each latent variable. The regression weight values for each construct are shown in Table 3.

Model Causality Test
This test is conducted to determine the causal relationship between variables by measuring the strength of the relationship between two or more latent variables. The results of calculations with AMOS 23 can be seen in Figure 1, Tables 3 and 4.

Figure 2: Test Results
Based on the t-count significance in Table 6 with a probability value (p) = 0.05, it is found that the latent variables have a significant influence because they have a probability value smaller than 0.05. It can be explained more clearly as follows; 1. Exploitative Learning has a significant positive effect on SME Performance with a p value <0.05 with CR 3.093 (H1 accepted).

Organizational
Learning has a significant positive effect on SME Performance with a p value <0.05 with CR 7.336 (H2 accepted) 3. Environmental Dynamism has a significant influence as a moderating variable on the causal relationship between Exploitative Learning and SME Performance with a p value <0.05. With CR 3,800 (H3 accepted).

Environmental Dynamism has a significant influence as a moderating variable on the causal relationship between Organizational
Learning and SME Performance with a p value <0.05. With CR 5.577 (H4 accepted).
This explanation also concludes that H1 to H4 is accepted.

Discussion and Hypothesis Testing
The findings of this study indicate that the first hypothesis put forward that exploitative learning has an effect on the performance of SMEs is acceptable. This can be seen from the CR value of 3.093. In other words, the performance of SMEs is significantly influenced by exploitative learning. This finding corroborates previous research conducted by Zhang et al. (2023) that exploitative learning is a type of learning in which organizations focus on perfecting and optimizing existing processes and practices to improve their performance. In addition, Ali et al. (2022) stated that this approach is often contrasted with exploratory learning, where organizations look for new opportunities and experiment with new ideas. In terms of business performance Belhadi et al. (2022) mentions that exploitative learning can have either positive or negative effects. By focusing on what can improve performance, an organization can streamline its operations and reduce costs so that business can be conducted efficiently. Managers or business owners who have exploitative capabilities are able to manage their resources so that they can have an impact on business performance. Thus, the higher the exploitative learning possessed by SMEs, the better the business performance. In practice, managers or business owners can use their internal and external organizational resources or by combining their core expertise so that they can respond to increasingly massive environmental changes. With all of that, SMEs will be able to improve their performance.
Then, this study also proves that the second hypothesis proposed regarding the direct effect of organizational learning on SME performance is acceptable. This influence is positive, which means that organizational learning can improve the performance of SMEs. The results of this study are in accordance with the findings of Tian et al. (2020) that organizational learning refers to the process by which organizations acquire knowledge to help improve business performance. Belinski et al. (2020) states that organizational learning includes a variety of activities ranging from training programs, development to knowledge sharing and collaboration. According to Bilan et al. (2020) organizational learning can help SME actors make more informed and effective decisions. In addition, organizations that invest in learning and development programs are more likely to improve their performance (Kovacova & Lăzăroiu, 2021;Tu & Wu, 2021).
Furthermore, this study looks at the role of environmental dynamism as a moderating variable that can affect the relationship between exploitative learning and organizational learning on SME performance. The test results show that environmental dynamism is able to strengthen the influence of the exploitative and performance of SMEs, as well as organizational learning on the performance of SMEs. These results are in line with findings from Oh (2019) that organizations need to adapt to environmental changes and the rapid dissemination of information is needed in making decisions so that this forces organizations to reintegrate their internal processes with a dynamic environment. Brix (2019) stated that environmental dynamism refers to the extent to which the external business environment changes which includes technological advances, regulatory changes, and other external factors. This can have a significant impact on business performance because it creates opportunities and challenges for organizations (Bilan et al., 2020)

Conclusion
This research contributes to the literature on exploitative learning and organizational learning which are considered to still have limitations in understanding their impact on the performance of SMEs, especially in developing countries. This study also answers the limitations and needs of previous research by linking environmental dynamism with exploitative learning, organizational learning and SME performance, and looking at its role as a moderating variable. The results of this study also show that these two variables have a positive and significant effect on the performance of SMEs and this influence will be stronger when SMEs have a good understanding of environmental dynamism. The findings of this study also found that many obstacles were faced by SMEs to be able to explore new opportunities and produce innovative products. Therefore, this research is expected to be a consideration for SME owners, especially in the city of Jakarta, to be able to improve and invest their resources in supporting organizational learning so as to improve their performance. Exploitative learning and organizational learning are two different approaches to learning in an organization. Exploitative learning refers to the process of increasing existing competencies or skills by optimizing existing systems and processes. This type of learning involves incremental improvements to existing knowledge and skills, and is focused on refining existing practices to make them more efficient and effective. Meanwhile, organizational learning is focused on creating new knowledge and skills that can help organizations adapt and respond to changes in the external environment. This type of learning involves exploring new ideas and approaches, experimenting with new technologies, and engaging in activities that encourage creativity and innovation. Although exploitative learning and organizational learning are different, they are both important for business performance. Exploitative learning can help organizations become more efficient and effective in their operations, while organizational learning can help organizations to stay competitive by identifying new opportunities and developing new competencies.
Like any other research, this research has its own limitations. First, this study only measures performance in the context of SMEs by looking at the role of exploitative learning and organizational learning. In addition, all data collected is only on certain types of SMEs located in the city of Jakarta, DKI Province in Indonesia. This certainly cannot generalize as a whole how the performance of SMEs can be improved. Many factors cause when the performance of SMEs declines. The factor of the type of industry as well as the scope and network is one of the reasons why the performance of SMEs can be hampered. Future studies should re-validate the factors that can hinder SME performance and how performance can be improved. Although this research expands on previous research on organizational learning by showing a positive effect on improving SME business performance, this research finds that respondents often tend to exaggerate their responses, giving rise to biases and factors that hinder them in improving their business performance. Thus, future researchers can reduce this bias and overcome the inhibiting factors by diversifying data sources and selecting respondents as objectively as possible.