Entrepreneurial orientation and performance in SMEs

Abstract

PurposeThis paper addresses the mediating effect of structural infrastructure capability on the relationship between entrepreneurial orientation (EO) and SMEs performance in emerging economies, focusing on Nigeria. It addresses the need to ensure that small and medium-sized enterprises (SMEs) are able to overcome the inherent challenges in their external environment actively and, thus, contribute to economic growth through internal management variables.Design/methodology/approachThe study adopted a survey design, utilising a sample of 377 SMEs covering the six geopolitical zones in Nigeria. A questionnaire was used for data collection, and data analysis was conducted using partial least squares structural equation modelling (PLS-SEM) with the aid of SmartPLSv3.FindingsThe study found that innovativeness and proactiveness, as dimensions of EO, have a significant effect on SMEs' performance. Risking-taking, however, showed no significant effect on performance. The study found that structural infrastructure capability significantly mediates the EO–performance relationship.Practical implicationsThe paper provides practical implications for society, as managers and SMEs' support agencies in emerging markets can be encouraged to focus more on internal management activities to support knowledge sharing within the organisation, given its relevance to improving performance, rather than focusing only on EO.Originality/valueThe study further strengthens and validates the resource-based view (RBV) theory and contributes to expanding knowledge on the relevance of internal management variables (knowledge sharing) in managing small and medium-scale enterprises. The study further advances theories regarding knowledge management's role, as a function of internal management system in the EO–performance relationship, thus helping to close the research gap related to these relationships from an emerging-economy perspective.