The impact of Strategic Orientation mediated by Absorptive Capacity on Firm Performance

This study analyzes the impact of Strategic Orientation; (Entrepreneurial Orientation (EO), Market Orientation (MO), Learning Orientation (LO), and Innovation Orientation (IO)) on Firm Performance (FP) mediated by Absorptive Capacity (AC). Employing a descriptive approach and collecting data from a sample of Top Management of Rural Banks (BPR). Data analysis was conducted using Partial Least Square with SmartPLS 4.0 software. The research results indicate that strategic orientations have a direct positive influence on both AC and FP. Indirectly, EO has a positive influence on FP mediated by AC, and IO has a positive influence on FP mediated by AC. Meanwhile, MO and LO have no influence on FP mediated by AC. The research results provide recommendations for banks to utilize AC to drive increased FP.