The Effect of Entrepreneurial Orientation on SMEs Business Performance in Indonesia

Erna Herlinawati · Suryana · Eeng Ahman · Amir Machmud

46 citations0/0 files storedJournal of Entrepreneurship Education

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Entrepreneurship Studies and Influences SMEs Development and Digital Marketing Financial Literacy and Behavior

Abstract

This study aims to analyze the effect of entrepreneurial orientation on business performance. Entrepreneurial orientation is measured through innovativeness, proactiveness, risk taking, and aggressiveness, while business performance is measured through the Balanced Scorecard perspective. The research method uses explanatory methods with data collection techniques through questionnaires and interviews. Population is SMEs in the manufacturing industry sector in West Java, Indonesia measuring 203,181 with proportional random sampling technique obtained by sample 346 SMEs. The data that has been collected is then analyzed using a Likert scale system, descriptive syllogism analysis and Structural Equation Modeling (SEM). The results showed that entrepreneurial orientation in all dimensions (innovativeness, proactiveness, risk taking, and aggressiveness) tended to be low. Likewise with business performance (perspective: financial, customers, internal business processes, learning and growth) are at a level that tends to be low, which illustrates entrepreneurial orientation positively influences business performance. The implication of this research is that the lack of development of the desire of SMEs actors to seek business opportunities and become leaders in an increasingly dynamic business environment, if not allowed to hinder the growth of business performance, also weakens competitiveness so that SMEs products are not marketable. This finding implies, to improve business performance, SMEs players in running their businesses are always entrepreneurial oriented.

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References

1992The balanced scorecard : measures that drive performance 1996Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance 1994Marketing Research: An Applied Orientation 1989Strategic management of small firms in hostile and benign environments 1983The Correlates of Entrepreneurship in Three Types of Firms 1991A Conceptual Model of Entrepreneurship as Firm Behavior 2009Entrepreneurial Orientation and Business Performance: An Assessment of past Research and Suggestions for the Future 2004Entrepreneurial orientation and small business performance: a configurational approach

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