THE BUSINESS MODEL INNOVATION LINKING ENTREPRENEURIAL ORIENTATION, DESIGN INNOVATION, MARKET RESPONSIVENESS & FIRM PERFORMANCE

Abstract

This study examined the influence of the entrepreneurial orientation, design innovation, and market responsiveness on financial performance of interior design and architecture firms. It investigated the mediating role of business model innovation in explaining how creative & entrepreneurial capabilities are converted into financial outcomes. The study adopted quantitative design. Data were collected through structured questionnaires from professionals working in interior design and architecture firms, including the designers, architects, managers, and firm owners. The proposed relationships were thus analyzed using structural equation modeling to assess direct effects, indirect effects and model fitness. Findings revealed that entrepreneurial orientation, design innovation, and market responsiveness had significant positive effects on business model innovation. Business model innovation had a significant positive effect on financial performance. The results further confirmed that business model innovation mediated the relationships between independent variables and financial performance. Thus, the results provide significant information in reaching the conclusion and making suitable decisions. These findings indicate that interior design & architecture firms improve financial performance when entrepreneurial behavior, innovative design practices, and the market awareness are translated into the flexible as well as value-creating business models.