Abstract
This study was conceived as an attempt to study the relationship of Entrepreneurial Orientation and Business Performance in the Small and Medium Enterprises (SMEs) of Kurunegala District in Sri Lanka. The study was conducted on 275 SMEs in Kurunegala engaged in varied businesses including coconut products, rubber based products, garments and apparels, cement and clay pots, housing and real estate etc. The Entrepreneurial dimensions viz., Innovativeness, Risk Taking Propensity, Pro-Activeness, Competitive Aggressiveness and Autonomy were tested to assess their impact on the business performance. The entrepreneurial orientation and business performance relationship was found to be strong and significant indicating that the SMEs in Kurunegala district adopted better EO postures towards achieving promising returns in their business.
Highlights
Small industries have prominently been acknowledged as the major source of employment and livelihood across the rural areas of Sri Lanka
The topic of entrepreneurial orientation and the firm’s business performance relationship over the years has received considerable attention and the researchers have theorized the incidence of entrepreneurial behaviors such as propensity to engage in risk taking, innovation and proactive behaviors being positively associated with the profit and growth of the organization [14]
A larger emphasis has been on finding the relationship between entrepreneurship and business performance and relevant theories have been postulated to understand the incidence of entrepreneurial behaviour at firm level like risk taking ability, innovativeness, autonomy, competitive aggressiveness and pro-activeness which has positive relationship with the profitability or growth [10] [15]
Summary
Small industries have prominently been acknowledged as the major source of employment and livelihood across the rural areas of Sri Lanka. The Cottage and Small Scale Industries have played a vital role in the economic development by generating employment opportunities, domestic savings mobiliza-. The quality of employment provided by the large scale sector can be pronounced better compared to the small scale industries, in the rural areas. The contribution of SMEs towards economic development is considerably low in Sri Lanka, they have accounted for larger percentage of overall establishments. The medium sized establishments have contributed more to the employment generation and value addition as compared to the SMEs in Sri Lanka. In terms of the GDP of export sector in Sri Lanka, the small and medium enterprises contribute more than 70%. Around 70% of the tea production in Sri Lanka comes from the small farmers whose land holding is less than an acre [3]
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