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Impact of Entrepreneurial Orientation on MSME Performance: Mediating Role of Entrepreneurial Competency

  • Arpita Goyal ORCID logo and Uma Sankar Mishra ORCID logo EMAIL logo
Published/Copyright: April 19, 2023
Entrepreneurship Research Journal
From the journal Entrepreneurship Research Journal Volume 14 Issue 4

Abstract

This study uses entrepreneurial competencies as a mediating element to explore the scope and pattern of influence of entrepreneurial orientation (EO) on micro, small and medium entrepreneur (MSME) business success. The study’s target population was small-scale business owners and employees from Rajasthan, India. A sample of 339 small companies was selected through the purposive sampling method. Data were gathered through a survey instrument designed given an appropriate theoretical context. The survey instrument was tested for its proper validity and reliability. Further, we used the structural equation modeling approach to test the hypotheses. Derived findings indicated that the direct impact of entrepreneurial orientation (EO) on firm performance was significant. Additionally, the relationship between EO and MSME performance was partially mediated by entrepreneurial competencies. The conceptual framework and findings offer the MSME sector entrepreneur new directions for positioning their product in customers’ minds and supporting the growth of an innovative and opportunistic mindset. The current research findings help to outperform the competition and take advantage of market opportunities. The organization must be able to correctly match what it delivers to the consumer with the needs and demands of the customer.

Keywords: entrepreneurial orientation; MSME performance; innovation; entrepreneurial competencies; proactiveness; risk-taking
Corresponding author: Uma Sankar Mishra, Professor, Dept. of Management, Central University of Rajasthan, NH-8 Bandarsinderi, Kishangarh, Ajmer, Rajasthan, 305817, India, E-mail:

Annexure

Construct Dimension Item (code and statement)
Entrepreneurial orientation (EO) Innovation (I) I1 My company emphasizes actual practices, equipment, and products/services.
I2 Minor changes have been made to my product/services in the last three years.
I3 Even though I know some of them will fail, my management style values creative solutions.
I4 Our company has launched numerous new products or service lines in the last three years.
I5 My company chooses to build its unique new processes and product ways.
Proactiveness (P) P1 I believe that the shifting market of my company gives favorable opportunity.
P2 We look for new businesses or markets to focus on.
P3 Our firm places a significant focus on technical leadership.
P4 We frequently take action that competitors respond to.
P5 My company keeps a close eye on trends to discover future client needs.
Risk-taking (RT) RT1 As a whole, my company manages risks appropriately and avoids taking risks properly, and avoids taking actions without adequate foresight, study, and planning.
RT2 My firm believes that taking more financial risks in exchange for more significant benefits is worthwhile.
RT3 My company only puts plans in place if I am confident they will work.
RT4 Because of the nature of the environment, it is better to investigate it gradually through careful, incremental behavior.
RT5 We encourage our employees to experiment with fresh ideas.
Entrepreneurial competencies (EC) EC1 I build long-term relationships with others based on trust.
EC2 Actively seek out items or services that assist customers in some way.
EC3 Develop a personal network of professional contacts.
EC4 Please keep track of how dangerous acts are progressing toward their goals.
EC5 Look at new issues as chances to learn something new.
EC6 Set job priorities that are in line with the company’s objectives.
EC7 I want to learn everything I can about my field.
EC8 Maintain an optimistic frame of mind.
EC9 Recognize and match my strengths and weaknesses to opportunities and threats.
MSME performance Financial performance (FP) FP1 We outperformed our competition in terms of return on investment.
FP2 We increased the number of staff faster than our competition.
FP3 We grew our market share faster than our competition.
FP4 We have a decent grasp of each of our markets’ sales potential.
Technological performance (TP) TP1 Technological changes provide ample opportunities in our industry.
TP2 Many new product ideas have been made possible through technological breakthroughs in our industry.
TP3 Based on research results, technological innovation is readily accepted in our organization.
TP4 Our industry offers many opportunities for technological innovation.
TP5 New technology is needed for growth in this industry.
Customer-focused (CF) CF1 We emphasize more to achieve desired customer satisfaction.
CF2 Retention of an existing customer is of utmost importance for my firm.
CF3 My firm always takes care of the quality of products and services.
CF4 We give more priority to creating customer value.
CF5 Customer commitment is one of our important objectives to achieve.

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Received: 2022-08-08
Revised: 2022-12-15
Accepted: 2023-03-05
Published Online: 2023-04-19

© 2023 Walter de Gruyter GmbH, Berlin/Boston

Articles in the same Issue

  1. Frontmatter
  2. Competitive Research Articles
  3. Impact of Entrepreneurial Orientation on MSME Performance: Mediating Role of Entrepreneurial Competency
  4. The Development of Corporate Entrepreneurship among Emerging Economy SMEs: Insights from Both Institutional and Contingency Theory
  5. The Dynamic Capabilities of High-Turbulent Markets: Indonesian Start-Up Cases During COVID-19 Pandemic
  6. Entrepreneurship, Resource Rents and Institutions
  7. The Scaling Strategies and the Scaling Performance of Chinese Social Enterprises: The Moderating Role of Organizational Resources
  8. Research on Corporate Entrepreneurship in Developing Countries: A Review and Agenda for Future Directions
  9. The Impact of Initial Intellectual Property Decisions of Start-Ups on Innovation Performance
  10. Social Capital and Innovative Performance in Networks: The Journey of Romanian SaaS Entrepreneurs
  11. Gender Differences in the use of Social Capital for Entrepreneurial Activity Within Contexts of Poverty
  12. Commitment Helps: The Positive Effects of Long-Term Orientation and Family Ownership on Firms’ International Expansion
  13. Institutional Environment, Executive Equity Incentive, and Enterprise Innovation: The Case of China
  14. Determinants of Entrepreneurial Employee Activity in Saudi Arabia
  15. How Does Entrepreneurial Role Model Connect to Entrepreneurial Perceptions: The Moderating Role of Psychological Distance
  16. The Influence of Top Management’s Strategic Planning Capacity and Entrepreneurial Orientation on Corporate Entrepreneurship
  17. Innovation Ambidexterity and Firm Performance: The Moderating Effects of Contextual Factors
https://doi.org/10.1515/erj-2022-0315
Keywords for this article
entrepreneurial orientation; MSME performance; innovation; entrepreneurial competencies; proactiveness; risk-taking

Articles in the same Issue

  1. Frontmatter
  2. Competitive Research Articles
  3. Impact of Entrepreneurial Orientation on MSME Performance: Mediating Role of Entrepreneurial Competency
  4. The Development of Corporate Entrepreneurship among Emerging Economy SMEs: Insights from Both Institutional and Contingency Theory
  5. The Dynamic Capabilities of High-Turbulent Markets: Indonesian Start-Up Cases During COVID-19 Pandemic
  6. Entrepreneurship, Resource Rents and Institutions
  7. The Scaling Strategies and the Scaling Performance of Chinese Social Enterprises: The Moderating Role of Organizational Resources
  8. Research on Corporate Entrepreneurship in Developing Countries: A Review and Agenda for Future Directions
  9. The Impact of Initial Intellectual Property Decisions of Start-Ups on Innovation Performance
  10. Social Capital and Innovative Performance in Networks: The Journey of Romanian SaaS Entrepreneurs
  11. Gender Differences in the use of Social Capital for Entrepreneurial Activity Within Contexts of Poverty
  12. Commitment Helps: The Positive Effects of Long-Term Orientation and Family Ownership on Firms’ International Expansion
  13. Institutional Environment, Executive Equity Incentive, and Enterprise Innovation: The Case of China
  14. Determinants of Entrepreneurial Employee Activity in Saudi Arabia
  15. How Does Entrepreneurial Role Model Connect to Entrepreneurial Perceptions: The Moderating Role of Psychological Distance
  16. The Influence of Top Management’s Strategic Planning Capacity and Entrepreneurial Orientation on Corporate Entrepreneurship
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