Entrepreneurial orientation and performance in SMEs

Abstract

PurposeThis paper addresses the mediating effect of structural infrastructure capability on the relationship between entrepreneurial orientation (EO) and SMEs performance in emerging economies, focusing on Nigeria. It addresses the need to ensure that small and medium-sized enterprises (SMEs) are able to overcome the inherent challenges in their external environment actively and, thus, contribute to economic growth through internal management variables.Design/methodology/approachThe study adopted a survey design, utilising a sample of 377 SMEs covering the six geopolitical zones in Nigeria. A questionnaire was used for data collection, and data analysis was conducted using partial least squares structural equation modelling (PLS-SEM) with the aid of SmartPLSv3.FindingsThe study found that innovativeness and proactiveness, as dimensions of EO, have a significant effect on SMEs' performance. Risking-taking, however, showed no significant effect on performance. The study found that structural infrastructure capability significantly mediates the EO–performance relationship.Practical implicationsThe paper provides practical implications for society, as managers and SMEs' support agencies in emerging markets can be encouraged to focus more on internal management activities to support knowledge sharing within the organisation, given its relevance to improving performance, rather than focusing only on EO.Originality/valueThe study further strengthens and validates the resource-based view (RBV) theory and contributes to expanding knowledge on the relevance of internal management variables (knowledge sharing) in managing small and medium-scale enterprises. The study further advances theories regarding knowledge management's role, as a function of internal management system in the EO–performance relationship, thus helping to close the research gap related to these relationships from an emerging-economy perspective.

Linking Entrepreneurial Orientation with Innovation Performance in SMEs; the Role of Organizational Commitment and Transformational Leadership Using Smart PLS-SEM

“…The theory focuses on the resources as internal components of the organization and enhances the firm performance and competitiveness [20]. Previous literature posits that RBV is closely related to entrepreneurial orientation and its innovation abilities by identifying novel ideas, risk-taking, and proactive skills that enhance the SMEs' performance [8]. RBV significantly relates to the SMEs' performance because it assumes that internal capabilities are essential for firms' enhanced performance and competitive edge.…”

“…Hence, SMEs must adopt entrepreneurial orientation characteristics to enhance their innovation performance [22,27,28] and OC [7,29]. The present study concentrates on three characteristics of entrepreneurial orientation, "innovativeness, risk-taking and proactiveness" [8].…”

“…The literature has fairly maintained that entrepreneurial orientation is significantly associated with innovation performance [5,6], and organizational commitment [7] of firms. The firm's innovation level depicts the entrepreneurial orientation of the firm [8]. Many studies have elaborated the instrumental components of entrepreneurial orientation.…”

“…Additionally, SMEs need to innovate and be proactive in designating their strategic goals and practices to compete in the industry. Such objectives could only be achieved through the entrepreneurial orientation [8,39,40]. Entrepreneurial orientation has the potential to heighten the level of organizational commitment to a large extent.…”

Mediating role of strategic orientations in the relationship between entrepreneurial orientation and performance of Saudi SMEs

“…SME managers are thus inspired to use market orientation to satisfy evolving consumer expectations and concurrently accomplish market objectives (Masa'deh et al, 2018;Tidd and Bessant, 2018). Current research also shows the relation between market orientation and SMEs (Ali et al, 2020;Amin et al, 2016;Isichei et al, 2020), but requires further analysis for its exploration. The correlation between technology orientation and the performance of SMEs was also examined (Adegbuyi et al, 2018;Hsu et al, 2014;Rajala and Westerlund, 2012).…”