Relationship between Entrepreneurial Orientation and Business Performance among Malay-Owned SMEs in Malaysia: A PLS Analysis
Abstract
:1. Introduction
2. Literature Review
2.1. Dimensions of Entrepreneurial Orientation
“… points to a number of actions that can be regarded as entrepreneurial, i.e., the development of new products and markets, proactive behavior, risk-taking, the start-up of new organizations and the growth of an existing organization”.
2.2. Relationships between Entrepreneurial Orientation and Business Performance
3. Research Framework and Hypotheses
3.1. Autonomy
3.2. Risk-Taking and Its Relationship with Business Performance
3.3. Proactiveness
3.4. Innovativeness
3.5. Achievements
4. Research Design
4.1. Survey Design and Sampling
4.2. Measurement
Autonomy |
The firm administrator gives a unique idea and made a success out of it. |
The firm enables the passing of entrepreneurial ideas generated by members of firms to manage. |
The firm administrators don’t take ideas generated by members of firms and make their own decisions. |
The firm administrators are driven by the vision to establish their realm. |
The firm autonomy orientation gives a positive result to the firm performance |
Proactiveness |
The firm takes responsibility and does whatever it takes to ensure an entrepreneurial venture produces a successful outcome. |
The firm’s pro-activeness involves insistence, flexibility, and readiness to assume responsibility for failure. |
This firm enables us to anticipate future needs and take opportunities. |
This firm capitalizes on opportunities to gain benefit. |
This proactive orientation made influenced the firm performance. |
Risk-Taking |
The firm involves in errors a certain degree of risk and speculation. |
Firms always avoid taking a risk when the risk is unavoidable. |
The risk taken by the firms is predictable. |
The risk taken is calculated in the failure of the firms. |
The risk-taking orientation of the firm influence the performance of the company. |
Innovativeness |
This firm’s environment follows the shape of the latest market. |
This firm comes out with new ideas for the product, services, administration, or technological processes. |
The new idea applied to this firm is relevant to the firm, market, and environment. |
The new idea from the firm can be cultured to all the staff and administration |
Innovativeness of the company gives positive results to the firm performance. |
4.3. Data Analysis Technique
4.3.1. Measuring Construct Validity and Discriminant Validity
4.3.2. Reliability
4.3.3. Structural Model
5. Hypotheses Discussion
6. Limitations and Recommendations for Future Research
7. Implications
7.1. Implications for Research
7.2. Implications for Practice
8. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variables | Performance | Autonomy | Risk-Taking | Proactiveness | Innovativeness | Achievement | AVE | Cronbach’s Alpha |
---|---|---|---|---|---|---|---|---|
Performance | 0.728 | 0.531 | 0.8215 | |||||
Autonomy | 0.496 | 0.813 | 0.6611 | 0.8719 | ||||
Risk taking | 0.52 | 0.514 | 0.726 | 0.5279 | 0.7362 | |||
Proactiveness | 0.503 | 0.535 | 0.499 | 0.737 | 0.5442 | 0.778 | ||
Innovativeness | 0.521 | 0.420 | 0.5408 | 0.445 | 0.769 | 0.5926 | 0.8282 | |
Achievement | 0.629 | 0.537 | 0.4902 | 0.538 | 0.445 | 0.813 | 0.6611 | 0.8156 |
Variables | Performance | Autonomy | Risk-Taking | Proactiveness | Innovativeness | Achievement |
---|---|---|---|---|---|---|
Performance | ||||||
Autonomy | 0.694 | |||||
Risk taking | 0.680 | 0.714 | ||||
Proactiveness | 0.664 | 0.741 | 0.672 | |||
Innovativeness | 0.722 | 0.596 | 0.732 | 0.649 | ||
Achievement | 0.778 | 0.711 | 0.634 | 0.652 | 0.589 |
Hypotheses | Path Coefficient (β) | t-Value | Significance |
---|---|---|---|
Autonomy Performance | 0.033 | 0.865087 | Not Significant |
Risk-taking Performance | 0.134 | 2.535752 ** | Significant |
Proactiveness Performance | 0.089 | 1.965510 * | Significant |
Innovativeness Performance | 0.143 | 2.944450 ** | Significant |
Achievement Performance | 0.352 | 6.920889 ** | Significant |
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Alam, S.S.; Md Salleh, M.F.; Masukujjaman, M.; Al-Shaikh, M.E.; Makmor, N.; Makhbul, Z.K.M. Relationship between Entrepreneurial Orientation and Business Performance among Malay-Owned SMEs in Malaysia: A PLS Analysis. Sustainability 2022, 14, 6308. https://doi.org/10.3390/su14106308
Alam SS, Md Salleh MF, Masukujjaman M, Al-Shaikh ME, Makmor N, Makhbul ZKM. Relationship between Entrepreneurial Orientation and Business Performance among Malay-Owned SMEs in Malaysia: A PLS Analysis. Sustainability. 2022; 14(10):6308. https://doi.org/10.3390/su14106308
Chicago/Turabian StyleAlam, Syed Shah, Mohd Fairuz Md Salleh, Mohammad Masukujjaman, Mohammed Emad Al-Shaikh, Nurkhalida Makmor, and Zafir Khan Mohamed Makhbul. 2022. "Relationship between Entrepreneurial Orientation and Business Performance among Malay-Owned SMEs in Malaysia: A PLS Analysis" Sustainability 14, no. 10: 6308. https://doi.org/10.3390/su14106308