The purpose of this paper is to discuss the organizational performance and entrepreneurial orientation of Malaysian Small and Medium Enterprises (SMEs). Literature has shown that leadership and entrepreneurial orientation are important for organizational performance but still inadequate. Thus, this investigation hopes to close this gap in the literature and contribute to a new understanding of relationships between leadership and organizational performance, and entrepreneurial orientation served as a mediator. This study comprised a sample of owners or managers in the manufacturing and service sectors of SMEs located in Kuala Lumpur and Selangor, as their largest representation of SME establishments and significant contributions to Malaysia economy. A cross-sectional research design was used to examine the relationships between leadership behavior, entrepreneurial orientation and organizational performance among SMEs. The respondent’s lists were sought from the SME Corp. Malaysia at http://www.smecorp.gov.my and http://www.smeinfo.com.my. Data were gathered based on a mailed questionnaire and personal administered questionnaires. The findings indicate that entrepreneurial orientation acted as a partial mediator in the relationship between leadership behavior and organizational performance. Transformational leadership and transactional leadership were found to have a significant relationship with entrepreneurial orientation and organizational performance of SMEs. An important implication of this research indicated that both transformational and transactional leadership behavior positively increased the individual outcome and lead to higher organizational performance.

The purpose of this paper is to explore the extent of entrepreneurial competencies and innovation on business success in SMEs in Malaysia. Specifically, this study tested the mediating role of product innovation and process innovation between the relationship of entrepreneurial competencies and business success. The statical sample population of this research includes 407 owner and manager involved in SMEs, both manufacturing and services & other sectors. For data collection, a standard questionnaire using seven-point Likert scale and 72 items was used to evaluate 12 entrepreneurial competencies (strategic competency, commitment competency, conceptual competency, opportunity competency, organising and leading competency, relationship competency, learning competency, personal competency, technical competency, familism competency, ethical competency & social responsibility competency), seven items for innovation (product & process innovation) and, ten items for business success (financial & non-financial). Four hypotheses were developed in this study. The SPSS version 21.0 and Structural equation model (SEM)-AMOS version 21.0 techniques were used. The findings indicate that there is a positive and significant relationship between the entrepreneurial competencies and innovation on business success in SMEs. Moreover, there is a positive and significant relationship between all dimension of competencies and business success. The product innovation and process innovation served as partial mediator between entrepreneurial competencies and business success. Limitations and implications for future studies are discussed.