Moderating effects of Dynamic business environment on the relationship of Entrepreneurial Orientation and Financial Performance of SMEs (original) (raw)
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Journal of Critical Reviews, 2020
An entrepreneurial activity is one of the basic elements in reviving the economic situation in any country that desires to develop and rise. In the long run, any economic progress and success in any country depends on creative methods or entrepreneurial actions and activities. Entrepreneurship is one of the factors that directly or indirectly impact the economy of a nation; it plays an important role in shaping a country's economic landscape. The purpose of this study is to review the literature in the field of entrepreneurial orientation, to clarify to what extent entrepreneurial orientation influences financial performance and non-financial performance of the SMEs in Saudi. The focus of the review on entrepreneurial orientation is owing to its importance as a key variable in SMEs in emerging economies. In addition, entrepreneurial orientation is a key ingredient for organizational success and it leads to higher financial performance. Hence, the paper will clarify the interaction between the entrepreneurial orientation and financial, non financial performance of the firms. Moreover, as the concept of entrepreneurial orientation is important in competitive environment, it will be interesting to clarify the effect of entrepreneurial orientation on the performance of SMEs.
2019
The purpose of the study is to examine the moderating effect of the external environmental characteristics on the relationship between entrepreneurial orientation and SMEs performance. Survey method of research was used by personally administering questionnaires to the owners/managers. Multistage sampling technique was used in selecting 470 SMEs that partook in the survey. SPSS 24 and PLS-SEM 3.0 were employed in the analysis of the data. The results indicated that EO significantly affects SMEs performance. Similarly, there is a significant moderating effect of environmental dynamism on the relationship between EO and SMEs performance. Surprisingly, there is an adverse moderating effect of environmental complexity and hostility on the relationship between EO and SMEs performance. While environmental diversity shows insignificant moderating effect. Therefore, the study put forward that to attain high SMEs performance. There is a need for owners/managers to consider environmental char...
The Impact of Entrepreneurial Orientation on SME Performance in Pakistan: A Qualitative Analysis
— Small and medium enterprises (SMEs) are an important component of an economy. A progressing and flourishing SME sector helps an economy in overcoming macroeconomic problems of a country. This asserts importance of performance evaluation of SMEs. Entrepreneurial orientation (EO) is a firm's readiness towards accepting entrepreneurial practices, policies, and decision-making. EO has five dimensions that are innovativeness, proactivity, risk-taking, autonomy and competitive aggressiveness. This paper proposes a framework that links elements of EO with performance evaluation of SMEs. An evaluation of these factors may help decision-makers in improving business practices that may, in turn, positively influence the performance of SMEs.
Small and Medium Enterprises (SMEs) play an important role in economic growth, innovation, and competitiveness, which ultimately enhances business performance. This study investigated the three dimensions of Entrepreneurial Orientation (EO) of manufacturing sector SMEs in Punjab, Pakistan. In this study the effects of three EO dimensions including innovativeness, pro-activeness, and risk taking have been analyzed with regard to business performance. Questionnaire was used as the main instrument of data collection. Quantitative techniques were applied for analyzing the data. Innovativeness, pro-activeness, and risk taking have a significant impact over business performance of manufacturing sector SMEs. Results further indicated there were positive correlations among innovativeness, pro-activeness and risk taking with business performance of SMEs. This study could be useful for policy makers, owners, and managers to plan their activities for getting better performance of SMEs operating in Punjab, Pakistan.
Objective – This article aims to analyze the influence of moderating hostile and dynamic business environment variables on Individual Entrepreneurial Competence (IEC) and Entrepreneurial Orientation (EO) on Business Performance. Methodology/Technique – This study is conducted on Credit Union (microfinance), especially in West Kalimantan, using the Structural Equation Model technique. Findings – The results of the analysis show that the Individual Entrepreneurial Competence variables and Entrepreneurial Orientation have a positive influence on Business Performance. Meanwhile, Individual Entrepreneurial Competence and Entrepreneurial Orientation have a positive and greater influence on Business Performance in hostile environments. On the other hand, Individual Entrepreneurial Competence has a positive effect on Business Performance, but tend to be weak on dynamic environment. The Entrepreneurial Orientation has a positive and stronger impact on Business Performance in a dynamic environment. Novelty – The study helps to develop business environment for nurturing entrepreneurship.
Evaluating the effect of entrepreneurial orientation on SME's performance
2015
The Sports industry has played a vital role in the economy of Pakistan. The recent high failure rate of small and medium businesses in the sports sector has necessitated the need to identify strategies that will help to improve their performance. The primary objective of this study is to establish the level of entrepreneurial orientation of small and medium enterprises in the sports sector of Pakistan. Simple random sampling method was used to gather 153 usable questionnaires from small and medium businesses in Sialkot, Pakistan. An exploratory factor analysis was conducted to determine the validity of the measuring instrument. Cronbach's alpha coefficients were calculated to assess the reliability of the measuring instrument. Multiple regression analysis was performed to analyze the hypothesized relationships. The results of this study have shown that the dimensions of entrepreneurial orientation (i.e., pro-activeness, innovativeness, and competitive aggressiveness) have a significant positive influence on the success of the business, whereas the dimensions (i.e., autonomy and risk-taking) have no influence. The study has implications for both researchers and small and medium business owners.
The purpose of this study is to investigate the relationship of entrepreneurial orientation and business environment on firm performance, underpinned by Resource based view. Their relationship receives a considerable scholarly attention in the literature, but few studies have been conducted among Nigerian SMEs. SMEs are considered as important to the economic growth of Nigeria and they constitute the major source of employment and significantly contribute to the gross domestic production. Based on the theoretical consideration, a model was proposed to examine this relationship. A quantitative method was used with a total of 640 questionnaires personally distributed to the owner/managers of SMEs in Nigeria. A total of 511 questions was duly completed and returned representing 79.8% response rate. The study finding is in support of previous researchers who have suggested the positive relationship of entrepreneurial orientation and firm performance in many organizations. The finding from the study indicated no relationship between the business environment and firm performance. The finding from this study will benefit SME owner/managers, regulatory agency ie small and medium enterprise development agency of Nigeria, it will also help in policy formulation and will serve as a frame of future reference.
Influence of entrepreneurial orientation on the financial performance: evidence from SMEs in Iran
Middle East J. of Management, 2013
This study investigates entrepreneurial orientation (EO), resource-based view (RBV), and small and medium enterprises (SMEs) in Iran. Specifically, this study examines the relationship between EO and financial performance among SMEs in Iran. Using an original dataset of 150 SMEs in the manufacturing industry, a positive relationship was found between EO dimensions (i.e., innovativeness, proactiveness, and risk taking) and SME financial performance dimension (i.e., growth-profitability). These findings contribute to the importance of RBV as an underpinning theory that stresses a firm's unique proprietary assets, particularly intangible assets such as EO.
International Journal of Multidisciplinary and Current Research, 2018
This paper reviewed past literature with the aim of establishing the trends in published literature on dynamic capabilities, entrepreneurial orientation (EO) and business performance of Small and Medium Enterprise's (SMEs). Based on this review the relationship between dynamic capabilities, entrepreneurial orientation and business performance of SMEs is hinged on Schumpeter theory of innovations, (Schumpeter, 1942) and dynamic capability theory by Teeceet al (1997). Scholars have a common view that the association between EO and business performance is too complex hence moderated by variables. Dynamic capabilities (DC) have a moderating role between predictors of competitive advantage and business performance. The literature reviewed therefore presents the empirical studies globally and locally on moderation of dynamic capabilities on EO and business performance of SMEs. From the review it has been established that there are inconsistent findings in terms of relationships between DCs, EO and performance of SMEs which is justified by the fact that DCs, EO dimensions vary independently and may not be equally valuable across performance metrics or different stages of development of SMEs, besides different situations impacts on the relationship between DCs, EO and business performance of SMEs. In addition there is a dearth of literature on the moderating effect of dynamic capabilities on the relationship between EO and business performance thus calling for further interrogation in the context of developing countries. In conclusion there are mixed results in the linkage between EO and business performance, however effective integration and implementation of EO and DC would help the organization secure competitive advantage in the face of dynamic business environment to foster high business performance.
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.