The effects of entrepreneurial orientation on the performance of the Malaysian manufacturing sector

Abstract

Purpose The purpose of this paper is to examine the effects of entrepreneur orientation (EO) on firm performance of the Malaysian manufacturing sector. Design/methodology/approach Data for the study were collected through a survey of 321 companies registered with the Federation of Malaysian Manufacturers. Responses were analyzed using PLS-SEM to assess the relationships between transformational leadership and firm performance. Findings The findings show that amongst Malaysian manufacturers, transformational leadership has a strong direct effect on firm performance. Practical implications These findings provide useful insights for organizations, particularly in the Malaysian manufacturing sector, seeking to be competitive and responsive to environmental changes by successfully introducing EO. Originality/value EO has been studied in detail in the recent literature. Many new researchers have explored various composition factors of EO, and how this will have an effect on firm performance. However, there are few research studies in the area of transformational leadership amongst Malaysian manufacturing companies. This research makes an important contribution to the existing literature by empirically examining the relationship between EO and firm performance, particularly in the Malaysian manufacturing sector. Conclusion emphasizes that mechanisms to encourage and foster EO mainly autonomy, competitive aggressiveness and proactiveness are likely to result in the achievement of superior firm performance.

Entrepreneurial orientation, absorptive capacity and business performance in SMEs

“…According to Chin (1998), this indicator's range goes from 0 to 1, the result of EO Q 2 was 0.237, while for BP, 0.334; these values are considered moderate according to Hair et al (2017). (Gray, 2006;Adomako et al, 2016;Lee et al, 2019). Likewise, it is verified how ACAP influences as well on BP (Aljanabi, 2018), and also, it is established how ACAP moderates the relation between EO and BP (Venkatraman, 1989;Zahra and Hayton, 2008;Fernhaber and Patel, 2012;Hernandez-Perlines, 2018).…”

“…Numerous are the studies that establish a positive relation between EO and BP (Covin and Slevin, 1989;Miles and Arnold, 1991;Zahra and Covin, 1995;Lumpkin and Dess, 1996;Wiklund and Shepherd, 2005;Wang, 2008;Rauch et al, 2009;Engelen et al, 2014;Lee et al, 2019). In such studies, it is noticed that greater EO turns into better BP, thus it is demonstrated that firms, which decide to be proactive, to innovate and take risks are those with the better market and/or financial performance.…”

How Multidimensional Approach of Entrepreneurial Orientation (EO) Effect Firm Performance: A Critical Review

“…The study done by Loong Lee et al (2019) aims to study on how EO effect on Malaysian manufacturing sector's performance, and also to know how transformational leadership effect on firm performance. This paper examines multiple function of EO on firm performance.…”

“…Moreover, Shan et al (2015) emphasize on speed innovation could drive superior performance of firm. On the other hands, Linton and Kask (2016) configures EO with competitive strategy for high performance of firms like Malaysian manufacturers require other factors to support firm performance (Loong Lee et al, 2019). Loong Lee et al (2019) suggest leadership and culture of organization could boost the firm performance.…”

“…On the other hands, Linton and Kask (2016) configures EO with competitive strategy for high performance of firms like Malaysian manufacturers require other factors to support firm performance (Loong Lee et al, 2019). Loong Lee et al (2019) suggest leadership and culture of organization could boost the firm performance. However, the five dimensions of EO is not fully support for firm performance, especially in international context (Chen et al, 2019).…”