The critical success factors for organizational performance of SMEs in Malaysia: a partial least squares approach (original) (raw)
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The purpose of this study is to determine the impact of entrepreneurial orientation (EO) which is represented by five dimensions and business performance. A simple random sampling technique was adopted in which only hundred technology-based SMEs in Malaysia responded to the survey questionnaire and a total of eighty eight responses deemed to be usable. Descriptive statistical tool was used to analyze the data specifically Pearson product moment correlation and regression analysis.
Modeling Factors Affecting SME Performance in Malaysia
International Journal of Operations and Quantitative Management, 2022
This study presents research findings regarding the success elements of small and medium-sized enterprises (SMEs). Reliability and validity analyses indicate that the research instrument is a relatively reliable and useful measurement. However, the questions used to evaluate technological orientation may be more reliable. The study uncovered a correlation between technical focus and corporate success. However, these appeared to require moderating variables because further operational explanations were needed to link them to the business's profitability (Musa & Chinniah, 2016; Schuller, 2000). The study revealed that marketing, top management, customer focus, staff guidance, and corporate orientation indicated the performance of a business. However, legality hampered success. The development efforts of SMEs should thoroughly examine these facts. The model's relatively low explanatory power indicates that more factors are required to describe the business success of Malaysian SMEs more completely (Fachrunnisa et al., 2020).
Objective-Despite extensive research on Entrepreneurial Orientation (EO) and innovation and performance, there are still limited resources on how these areas benefit Small and Medium Enterprises (SMEs). There are various financial aids and support services that are provided to SMEs. Despite this, SMEs still tend to perform quite low. This paper aims to identify the link between EO and SME performance using innovation as a mediator. Methodology/Technique-To achieve this objective, a quantitative approach is used. Questionnaires are collected from 285 SMEs in Peninsular Malaysia. Structural Equation Modelling (SEM) analysis is applied to test the hypotheses on the direct and indirect relationships between EO and SME performance through innovation. Finding-The findings of this study show that only two aspects of EO (innovativeness and proactiveness) have significant relationships with SME performance. Interestingly, all dimensions of EO have a direct impact on innovation. Further, innovation has a direct effect on SME performance and is a significant mediator between EO and SME performance. Novelty-These findings indicate that EO is a strong predictor of Innovation and SME performance. The discussion provided in this paper strengthens the body of knowledge on Entrepreneurship and acts as a benchmark for future studies on EO, Innovation and SME Performance.
GATR Global Journal of Business and Social Science Review (GJBSSR) Vol.8(2) Apr-Jun 2020, 2020
Objective - Despite extensive research on Entrepreneurial Orientation (EO) and innovation and performance, there are still limited resources on how these areas benefit Small and Medium Enterprises (SMEs). There are various financial aids and support services that are provided to SMEs. Despite this, SMEs still tend to perform quite low. This paper aims to identify the link between EO and SME performance using innovation as a mediator. Methodology/Technique – To achieve this objective, a quantitative approach is used. Questionnaires are collected from 285 SMEs in Peninsular Malaysia. Structural Equation Modelling (SEM) analysis is applied to test the hypotheses on the direct and indirect relationships between EO and SME performance through innovation. Finding - The findings of this study show that only two aspects of EO (innovativeness and proactiveness) have significant relationships with SME performance. Interestingly, all dimensions of EO have a direct impact on innovation. Further...
Factors affecting Firm Performance of SMEs in Malaysia
International Journal of Academic Research in Business and Social Sciences
The study purpose is to identify the impact of factors (entrepreneurial orientation, information acquisition, and information utilization) on firm performance of Small Medium Enterprises (SMEs), in Malaysia. A quantitative method was adopted in this study and responses from 150 respondents that were chosen from the list population of SMEs in Malaysia were used. Regression analysis was conducted to test the hypothesis of study and establish the causal effect of entrepreneurial orientation, information acquisition, and information utilization towards firm performance of SMEs. The findings show that only two factors (information acquisition and information utilization) influence firm performance while entrepreneurial orientation was not found to relate with firm performance. Based on the results, the researcher found that information utilization was the most influence factors on firm performance of SMEs. The researcher suggests that SMEs should strengthening the effective marketing strategy or formulation of their business. Besides that, to improve acquire information of SMEs, they should be creative and innovative. Future study should increase sample size, choose multiple background industry, use qualitative methods or use other factors to relate with the performance of SMEs.
A Study on Factors Affecting the Performance of SMEs in Malaysia
In Malaysia, despite SMEs' have a significant contribution to the economy, they have not been given adequate attention as the various researchers have been biased towards larger and listed enterprises in Malaysia. So, this study aims to investigate the factors affecting the performance of SMEs in the manufacturing sector in Malaysia. The Contingency Theory developed by Fiedler (1964) was used to support this research. Based on the data collected from 300 SMEs in the Malaysian manufacturing sector, the results showed that there is a significant negative relationship between ineffective entrepreneurship as well as inappropriate human resource management (HRM) and the performance of SMEs. On the other hand, the results also proved that there is a significant positive relationship between the use of marketing information as well as the application of information technology and the performance of SMEs. In short, this study found out that the use of marketing information can influence the performance of SMEs at the highest.
The Effect of Entrepreneurial Orientation on SMEs Business Performance in Indonesia
Journal of Entrepreneurship Education, 2019
This study aims to analyze the effect of entrepreneurial orientation on business performance. Entrepreneurial orientation is measured through innovativeness, proactiveness, risk taking, and aggressiveness, while business performance is measured through the Balanced Scorecard perspective. The research method uses explanatory methods with data collection techniques through questionnaires and interviews. Population is SMEs in the manufacturing industry sector in West Java, Indonesia measuring 203,181 with proportional random sampling technique obtained by sample 346 SMEs. The data that has been collected is then analyzed using a Likert scale system, descriptive syllogism analysis and Structural Equation Modeling (SEM). The results showed that entrepreneurial orientation in all dimensions (innovativeness, proactiveness, risk taking, and aggressiveness) tended to be low. Likewise with business performance (perspective: financial, customers, internal business processes, learning and growth) are at a level that tends to be low, which illustrates entrepreneurial orientation positively influences business performance. The implication of this research is that the lack of development of the desire of SMEs actors to seek business opportunities and become leaders in an increasingly dynamic business environment, if not allowed to hinder the growth of business performance, also weakens competitiveness so that SMEs products are not marketable. This finding implies, to improve business performance, SMEs players in running their businesses are always entrepreneurial oriented.
An investigation of factors affecting SMEs performance: an Indonesian case
Diponegoro International Journal of Business
The objectives of this paper is to investigate factors that affecting SMEs performance. Particularly, our study examined the effect of entrepreneurial orientation, adaptability to external environment, and competitive advantage to SMEs performance. We also test the effect of entrepreneurial orientation and adaptability to external environment on SMEs competitive advantage. Results of structural equation modeling on 100 SMEs in Semarang, Central Java, Indonesia, suggested that entrepreneurial orientation and competitive advantage has a positive effect on SMEs business performance. However, our prediction that adaptability to external environment positively affect SMEs performance was not supported. Furthermore, our study also found that entrepreneurial orientation and adaptability to external environment positively affect SMEs competitive advantage.
LEADERSHIP, ENTREPRENEURIAL ORIENTATION AND PERFORMANCE: THE CASE OF SMES IN MALAYSIA
It is generally accepted that the entrepreneurs, who provide effective leadership, enhance organisational performance and ultimately their success. However, there has been a little empirical evidence to support the relationship between leadership and performance, especially within the Small and Medium Enterprises (SMEs) context in Malaysia. The current study, therefore, intended to examine the relationships among the three organisational components; namely leadership, entrepreneurial orientation (EO) and organisational performance. The study also observed the similarities and differences in the leadership behaviours displayed by entrepreneurs based upon their gender, company size and types of industry. A quantitative survey was conducted with 283 entrepreneurs or managers of SMEs in Malaysia. The results revealed that both transformational and transactional leadership behaviours were significantly related to entrepreneurial orientation and in turn the entrepreneurial orientation was also positively linked to organisational performance (which was measured by profitability and growth). T-Test results also indicated significant differences in leadership behaviours among leaders of company's based on size and type of industry.
Journal of Security and Sustainability Iss
The prime objective of the current study is to examine the impact of the entrepreneur orientation, market orientation, and the learning orientation on the performance of the SMEs in the Thailand. The study has employed the survey-based methodology. The response rate of the current study is 81 percent. The study has employed the structural equation modeling using SEM-PLS. The data is collected from the manufacturing SMEs in Thailand. The research findings obtained in this study contribute to the literature. The study attempted to analyze the effects of learning orientation, entrepreneurial orientation and market orientation on the SMEs performance in Indonesia. In previous studies, single strategy implementation resulted in suboptimal performance. Therefore, the present study further extended this theory by considering all three strategic orientation measures, i.e. market orientation, learning orientation and entrepreneur orientation as the significant SMEs performance drivers. The empirical findings obtained in this study provide supporting evidence in favor of resource-based view (RBV), which suggests the alignment of strategies for higher organizational performance. The findings offer deeper understanding about the effects of EO, MO and LO on the overall SMEs performance in Indonesia. The present study provides insights for the practitioners and policy makers which may facilitate them in the formulation of SMEs related policies. The analytical outcomes suggest that the SMEs managers must closely coordinate with the quality and marketing departments, thereby assisting them in promoting higher performance and customer satisfaction.