Learning from entrepreneurial failure: examining attribution and contextual factors of small- and medium-sized enterprises in Indonesia

Abstract

PurposeThis study's main objective is to examine the effect of learning from entrepreneurial failure on performance, with a type of failure as a moderator variable. Interactions between internal and external causes of failure and learning from entrepreneurial failure are also investigated, as well as entrepreneurs' aspects (i.e. age, experience and education) and organisational contextual factors (i.e. size, sector and location).Design/methodology/approachThis study employed a hypothetico-deductive approach through a survey of 250 purposively sampled entrepreneurs who had suffered business failures. The survey data were subjected to regression analysis and moderated regression using WarpPLS software and an independent sample t test for an in-depth analysis.FindingsThe results indicated that learning from entrepreneurial failure positively affected business performance, an effect moderated by the type of failure, particularly with large failures. Only perceived internal causes of failure exerted a positive effect on learning from entrepreneurial failure; the external causes did not. The effect of failure on business performance was stronger on entrepreneurs who were older and experienced, had non-university educations and operated small- and medium-sized enterprises (SMEs) outside Java–Bali islands.Originality/valueThis study's findings provide empirical evidence that supports the experiential learning theory and attribution theory in explaining the interaction between learning and failure, its cause, its consequences and its magnitude as perceived by entrepreneurs of SMEs in Indonesia, where the rate of failure is relatively high. The authors’ study also emphasises the roles of the entrepreneur and organisational contextual factors, which matter in learning to improve performance.

ERP-Based Management Information System for MSMEs in Indonesia: A Systematic Literature Review

“…There are many significant challenges that Indonesian MSMEs must overcome to adopt and operate an ERPbased information management system. One of the Nur Hasanah 1 , Dhanar lntan Surya Saputra [47], [48]. In addition, the need for more human resources trained in IT is also a challenge [49], [50].…”

Factores que explican, median y moderan el fracaso empresarial: Revisión de publicaciones indexadas en Scopus (2015-2022)

“…Asimismo, Johnson et al (1997); y, Munawaroh et al (2023), plantean que no todos los individuos reaccionan de la misma manera ante el fracaso empresarial. Mientras que, en algunos, impulsa a la pérdida de la motivación y el abatimiento, en otros, estimula mayor dedicación en la búsqueda del éxito.…”

“…En esta línea, se encuentran los enfoques: Organizacional, individuos, y recursos y capacidades. Por otra parte, los hallazgos evidencian que, existen estudios que utilizan el fracaso empresarial como una variable independiente, cuyas repercusiones pueden ser negativas (Mellahi y Wilkinson, 2004;Hazak y Mannasoo, 2007;García-Marí et al, 2016;Zizi et al, 2022;Lee, Wiklund et al, 2022); o positivas (Johnson et al,1997;Knott y Posen, 2005;McGrath, 2011;Lee, Simmons et al, 2022;Munawaroh et al, 2023).…”

Temporal Effects on Perception of Entrepreneurial Ecosystems in Sub-Saharan Africa: Evidence from Nigeria

“…Discussions of causal mechanisms within the evolution of and complex interactions among entrepreneurial ecosystem elements have not received adequate attention until recently (Wurth et al, 2021;Audretsch et al, 2021;Stam & van de Ven, 2019;Stam & Spiegel, 2017;Alvedalen & Boschman, 2017). Cause-effect relationships among entrepreneurial ecosystem elements are especially important for efficient entrepreneurial decisions as well as entrepreneurial learning (Munawaroh et al, 2023), which has been identified as a key ingredient for entrepreneurial survival and success (Shen et al, 2021). However, even though the entrepreneurial ecosystem point of view is inherently time-dependent (Audretsch et al, 2021), the role of time in these multifaceted and dynamic relationships has not been explicitly considered.…”

“…The cost of wrong attribution of the sources of business challenges or failure on such a large scale can be significant in terms of the amounts of resources expended in fighting wrong causes. Moreover, such attribution error can hamper the efforts of stakeholders, especially entrepreneurs and entrepreneurship educators, towards improving entrepreneurial learning for better business outcomes (Munawaroh et al, 2023;Riar et al, 2021).…”