The ENTREPRENEURIAL ORIENTATION TOWARDS MSME'S PERFORMANCE: ROLE OF RESOURCE DIMENSIONS
Orientasi Kewirausahaan pada Kinerja UMKM: Peran Dimensi Sumber Daya
Keywords:
Entrepreneurship orientation, firm performance, micro enterprise, financial resource availability, resource flexibility.Abstract
In this research, the effect of entrepreneurial orientation sub-dimensions on firm performance was discussed. Previous studies had shown that Indonesian MSMEs had problems with resources especially access to finance and managerial skills. This study included the availability of financial resources and flexibility of resources as moderating variables. The study used 149 micro-enterprise owners in the "Tangan Di Atas" (TDA) Community in Indonesia. SEM-PLS on SmartPLS was used as a tool in data analysis. The findings showed that two sub-dimensions, innovativeness, and proactiveness, had a significant positive relationship with firm performance, while resource flexibility moderated the relationship of innovativeness to performance significantly. The risk-taking variable showed a positive relationship with firm performance in the moderation of financial resources.
References
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Bonanno, G., Ferrando, A., & Rossi, S. P. S. (2023). Do innovation and financial constraints affect the profit efficiency of European enterprises? Eurasian Business Review, 13(1), 57–86. https://doi.org/10.1007/s40821-022-00226-z
Candra, S., Wiratama, I. N. A. D., Rahmadi, M. A., & Cahyadi, V. (2022). Innovation process of micro, small and medium enterprises (MSMEs) in greater Jakarta area (perspective from foodpreneurs). Journal of Science and Technology Policy Management, 13(3), 542–560. https://doi.org/10.1108/JSTPM-10-2020-0153
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Chod, J., & Zhou, J. (2012). Resource Flexibility and Capital Structure. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1741284
Claudino, T. B., Santos, S. M. dos, Cabral, A. C. de A., & Pessoa, M. N. M. (2017). Fostering and limiting factors of innovation in Micro and Small Enterprises. RAI Revista de Administração e Inovação, 14(2), 130–139. https://doi.org/10.1016/j.rai.2017.03.007
Covin, J. G., & Slevin, D. P. (1988). THE INFLUENCE OF ORGANIZATION STRUCTURE ON THE UTILITY OF AN ENTREPRENEURIAL TOP MANAGEMENT STYLE. Journal of Management Studies, 25(3), 217–234. https://doi.org/10.1111/j.1467-6486.1988.tb00033.x
Grozdanovska, V., Bojkovska, K., & Jankulovski, N. (2017). Financial Management and Financial Planning in the Organizations. European Journal of Business and Management, 9(2), 120–125.
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Lo, K., Ramos, F., & Rogo, R. (2017). Earnings management and annual report readability. Journal of Accounting and Economics, 63(1), 1–25. https://doi.org/10.1016/j.jacceco.2016.09.002
Naldi, L., Nordqvist, M., Sjöberg, K., & Wiklund, J. (2007). Entrepreneurial Orientation, Risk Taking, and Performance in Family Firms. Family Business Review, 20(1), 33–47. https://doi.org/10.1111/j.1741-6248.2007.00082.x
Rachmawati, E., Suliyanto, & Suroso, A. (2022). Direct and indirect effect of entrepreneurial orientation, family involvement and gender on family business performance. Journal of Family Business Management, 12(2), 214–236. https://doi.org/10.1108/JFBM-07-2020-0064
Rafiki, A., Nasution, M. D. T. P., Rossanty, Y., & Sari, P. B. (2023). Organizational learning, entrepreneurial orientation and personal values towards SMEs’ growth in Indonesia. Journal of Science and Technology Policy Management, 14(1), 181–212. https://doi.org/10.1108/JSTPM-03-2020-0059
Rahaman, M. A., Fatema, K., Lin, Z., & Saiyedul, M. (2021). Do Innovativeness, Proactiveness, and Risk-Taking affect Business Performance? : Entrepreneurial insights of FAMA’s Entrepreneurs. International Journal of Business Economics (IJBE), 3(1). https://doi.org/10.30596/ijbe.v3i1.7895
Runyan, R. C., Huddleston, P., & Swinney, J. (2006). Entrepreneurial orientation and social capital as small firm strategies: A study of gender differences from a resource-based view. The International Entrepreneurship and Management Journal, 2(4), 455–477. https://doi.org/10.1007/s11365-006-0010-3
Saha, K., Kumar, R., Dutta, S. K., & Tiwari, P. (2021). Validating multidimensional entrepreneurial orientation in emerging economies. European Business Review, 33(5), 797–817. https://doi.org/10.1108/EBR-07-2020-0184
Tsai, H.-F., & Luan, C.-J. (2016). What makes firms embrace risks? A risk-taking capability perspective. BRQ Business Research Quarterly, 19(3), 219–231. https://doi.org/10.1016/j.brq.2016.01.002
Wales, W. J. (2016). Entrepreneurial orientation: A review and synthesis of promising research directions. International Small Business Journal: Researching Entrepreneurship, 34(1), 3–15. https://doi.org/10.1177/0266242615613840
Wang, E. S.-T., & Juan, P.-Y. (2016). Entrepreneurial Orientation and Service Innovation on Consumer Response: A B&B Case. Journal of Small Business Management, 54(2), 532–545. https://doi.org/10.1111/jsbm.12156
Wiklund, J., & Shepherd, D. A. (2011). Where to from Here? EO-as-Experimentation, Failure, and Distribution of Outcomes. Entrepreneurship Theory and Practice, 35(5), 925–946. https://doi.org/10.1111/j.1540-6520.2011.00454.x
Xie, X., Zeng, S., Peng, Y., & Tam, C. (2013). What affects the innovation performance of small and medium-sized enterprises in China? Innovation, 15(3), 271–286. https://doi.org/10.5172/impp.2013.15.3.271
Zahra, S. A., & Bogner, W. C. (2000). Technology strategy and software new ventures’ performance. Journal of Business Venturing, 15(2), 135–173. https://doi.org/10.1016/S0883-9026(98)00009-3
Bank of Indonesia. (2015). Profil Bisnis Usaha Mikro, Kecil dan Menengah (UMKM): Kerjasama LPPI deangan Bank Indonesia. Bank Indonesia. https://www.bi.go.id/id/umkm/penelitian/Documents/Profil Bisnis UMKM.pdf
Banwo, A. O., Du, J., & Onokala, U. (2017). The determinants of location specific choice: small and medium-sized enterprises in developing countries. Journal of Global Entrepreneurship Research, 7(1), 16. https://doi.org/10.1186/s40497-017-0074-2
Begley, T. M., & Boyd, D. P. (1987). Psychological characteristics associated with performence in entrepreneurial firms and smaller businesses. Journal of Business Venturing, 2(1), 79–93. https://doi.org/10.1016/0883-9026(87)90020-6
Beliaeva, T., Shirokova, G., Wales, W., & Gafforova, E. (2020). Benefiting from economic crisis? Strategic orientation effects, trade-offs, and configurations with resource availability on SME performance. International Entrepreneurship and Management Journal, 16(1), 165–194. https://doi.org/10.1007/s11365-018-0499-2
Bonanno, G., Ferrando, A., & Rossi, S. P. S. (2023). Do innovation and financial constraints affect the profit efficiency of European enterprises? Eurasian Business Review, 13(1), 57–86. https://doi.org/10.1007/s40821-022-00226-z
Candra, S., Wiratama, I. N. A. D., Rahmadi, M. A., & Cahyadi, V. (2022). Innovation process of micro, small and medium enterprises (MSMEs) in greater Jakarta area (perspective from foodpreneurs). Journal of Science and Technology Policy Management, 13(3), 542–560. https://doi.org/10.1108/JSTPM-10-2020-0153
Carvache-Franco, O., Carvache-Franco, M., & Carvache-Franco, W. (2022). Barriers to Innovations and Innovative Performance of Companies: A Study from Ecuador. Social Sciences, 11(2), 63. https://doi.org/10.3390/socsci11020063
Chod, J., & Zhou, J. (2012). Resource Flexibility and Capital Structure. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1741284
Claudino, T. B., Santos, S. M. dos, Cabral, A. C. de A., & Pessoa, M. N. M. (2017). Fostering and limiting factors of innovation in Micro and Small Enterprises. RAI Revista de Administração e Inovação, 14(2), 130–139. https://doi.org/10.1016/j.rai.2017.03.007
Covin, J. G., & Slevin, D. P. (1988). THE INFLUENCE OF ORGANIZATION STRUCTURE ON THE UTILITY OF AN ENTREPRENEURIAL TOP MANAGEMENT STYLE. Journal of Management Studies, 25(3), 217–234. https://doi.org/10.1111/j.1467-6486.1988.tb00033.x
Grozdanovska, V., Bojkovska, K., & Jankulovski, N. (2017). Financial Management and Financial Planning in the Organizations. European Journal of Business and Management, 9(2), 120–125.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2012). Partial Least Squares: The Better Approach to Structural Equation Modeling? Long Range Planning, 45(5–6), 312–319. https://doi.org/10.1016/j.lrp.2012.09.011
Hoegl, M., Gibbert, M., & Mazursky, D. (2008). Financial constraints in innovation projects: When is less more? Research Policy, 37(8), 1382–1391. https://doi.org/10.1016/j.respol.2008.04.018
Jalali, A., & Jaafar, M. (2019). The Role of Proactiveness as a Mediatore Between Organizational-Stakeholders Relationship and Smes Performance. Journal of Southwest Jiaotong University, 54(3). https://doi.org/10.35741/issn.0258-2724.54.3.24
Khan, R. U., Salamzadeh, Y., Kawamorita, H., & Rethi, G. (2021). Entrepreneurial Orientation and Small and Medium-sized Enterprises’ Performance; Does ‘Access to Finance’ Moderate the Relation in Emerging Economies? Vision: The Journal of Business Perspective, 25(1), 88–102. https://doi.org/10.1177/0972262920954604
Kiss, A. N., Cortes, A. F., & Herrmann, P. (2022). CEO proactiveness, innovation, and firm performance. The Leadership Quarterly, 33(3), 101545. https://doi.org/10.1016/j.leaqua.2021.101545
Kreiser, P. M., & Davis, J. (2010). Entrepreneurial Orientation and Firm Performance: The Unique Impact of Innovativeness, Proactiveness, and Risk-taking. Journal of Small Business & Entrepreneurship, 23(1), 39–51. https://doi.org/10.1080/08276331.2010.10593472
Lita, R. P., Faisal, R. F., & Meuthia, M. (2020). Enhancing small and medium enterprises performance through innovation in Indonesia. Journal of Hospitality and Tourism Technology, 11(1), 155–176. https://doi.org/10.1108/JHTT-11-2017-0124
Lo, K., Ramos, F., & Rogo, R. (2017). Earnings management and annual report readability. Journal of Accounting and Economics, 63(1), 1–25. https://doi.org/10.1016/j.jacceco.2016.09.002
Naldi, L., Nordqvist, M., Sjöberg, K., & Wiklund, J. (2007). Entrepreneurial Orientation, Risk Taking, and Performance in Family Firms. Family Business Review, 20(1), 33–47. https://doi.org/10.1111/j.1741-6248.2007.00082.x
Rachmawati, E., Suliyanto, & Suroso, A. (2022). Direct and indirect effect of entrepreneurial orientation, family involvement and gender on family business performance. Journal of Family Business Management, 12(2), 214–236. https://doi.org/10.1108/JFBM-07-2020-0064
Rafiki, A., Nasution, M. D. T. P., Rossanty, Y., & Sari, P. B. (2023). Organizational learning, entrepreneurial orientation and personal values towards SMEs’ growth in Indonesia. Journal of Science and Technology Policy Management, 14(1), 181–212. https://doi.org/10.1108/JSTPM-03-2020-0059
Rahaman, M. A., Fatema, K., Lin, Z., & Saiyedul, M. (2021). Do Innovativeness, Proactiveness, and Risk-Taking affect Business Performance? : Entrepreneurial insights of FAMA’s Entrepreneurs. International Journal of Business Economics (IJBE), 3(1). https://doi.org/10.30596/ijbe.v3i1.7895
Runyan, R. C., Huddleston, P., & Swinney, J. (2006). Entrepreneurial orientation and social capital as small firm strategies: A study of gender differences from a resource-based view. The International Entrepreneurship and Management Journal, 2(4), 455–477. https://doi.org/10.1007/s11365-006-0010-3
Saha, K., Kumar, R., Dutta, S. K., & Tiwari, P. (2021). Validating multidimensional entrepreneurial orientation in emerging economies. European Business Review, 33(5), 797–817. https://doi.org/10.1108/EBR-07-2020-0184
Tsai, H.-F., & Luan, C.-J. (2016). What makes firms embrace risks? A risk-taking capability perspective. BRQ Business Research Quarterly, 19(3), 219–231. https://doi.org/10.1016/j.brq.2016.01.002
Wales, W. J. (2016). Entrepreneurial orientation: A review and synthesis of promising research directions. International Small Business Journal: Researching Entrepreneurship, 34(1), 3–15. https://doi.org/10.1177/0266242615613840
Wang, E. S.-T., & Juan, P.-Y. (2016). Entrepreneurial Orientation and Service Innovation on Consumer Response: A B&B Case. Journal of Small Business Management, 54(2), 532–545. https://doi.org/10.1111/jsbm.12156
Wiklund, J., & Shepherd, D. A. (2011). Where to from Here? EO-as-Experimentation, Failure, and Distribution of Outcomes. Entrepreneurship Theory and Practice, 35(5), 925–946. https://doi.org/10.1111/j.1540-6520.2011.00454.x
Xie, X., Zeng, S., Peng, Y., & Tam, C. (2013). What affects the innovation performance of small and medium-sized enterprises in China? Innovation, 15(3), 271–286. https://doi.org/10.5172/impp.2013.15.3.271
Zahra, S. A., & Bogner, W. C. (2000). Technology strategy and software new ventures’ performance. Journal of Business Venturing, 15(2), 135–173. https://doi.org/10.1016/S0883-9026(98)00009-3
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Published
2024-08-13
How to Cite
Muthia Pramesti. (2024). The ENTREPRENEURIAL ORIENTATION TOWARDS MSME’S PERFORMANCE: ROLE OF RESOURCE DIMENSIONS: Orientasi Kewirausahaan pada Kinerja UMKM: Peran Dimensi Sumber Daya. International Student Conference on Business, Education, Economics, Accounting, and Management (ISC-BEAM), 2(1). Retrieved from https://journal.unj.ac.id/unj/index.php/isc-beam/article/view/46979
