Leadership Behaviour, Entrepreneurial Orientation and Organisational Performance in Malaysian Small and Medium Enterprises

Abstract

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.

How does organizational leadership contribute to the firm performance through social responsibility strategies?

“…Though the CSR expectation was higher than the real CSR expectation that was practiced by Malaysian firms (Zahid et al, 2020), the gained results were consistent with those who found positive effect of OL on CSR (Rehmani and Khokhar, 2018;Tourigny et al, 2019;Williams and Seaman, 2016), positive effect of leadership on non-financial performance (AlAnazi et al, 2016;Alsayyed et al, 2020;Hashim et al, 2018), introducing non-financial performance as a mediator between CSR and financial performance (Saeidi et al, 2015). And as a new finding, this study found a mediating role of CSR between OL and firm performance.…”

The Effect of Transformational Leadership on Entrepreneurial Orientation: The Mediating Role of Organizational Learning Capability

“…This finding aligns with those from other previous studies (e.g. Afsar et al, 2017;Hashim et al, 2018) which indicated the important role played by a transformational style of leadership in enhancing a firm's entrepreneurial orientation. Transformational leaders are known for their ability to stimulate employees to achieve their goals, building trust between them, inspiring them to do more than expected and supporting them to pursue and achieve an appealing vision.…”

The influence of Perceived Leadership Styles on Employee Commitment: The Mediating Role of Conflict Management

“…Furthermore, job title, marital status, and length of service all have an impact on employee commitment. The degree of employee commitment has been linked to the extent to which the organization has met certain employee needs (Hashim et al, 2018).…”