Managing Organizational performance of pharmaceutical SMEs in Indonesia: Examining the Role of Entrepreneurial Orientation and Organizational Learning in a Mediated Model

Saeed Abbas Shah,Muzafar Hussain Shah,Sheema Matloob,Syed Iradat Abbas

doi:10.33166/acdmhr.2021.01.003

Saeed Abbas Shah, Muzafar Hussain Shah + Show 2 more

Open Access

https://doi.org/10.33166/acdmhr.2021.01.003

Copy DOI

Abstract

The theme of the current research is to assess the link between entrepreneurial orientation, organizational learning with organizational performance using structural equation modeling. The current work was based on a quantitative approach using cross-sectional survey methodology. The study examined the effect of entrepreneurial orientation (EO) on organizational learning (OL), organizational performance (OP), and of organizational learning (OL) on organizational performance (OP). Moreover, the study also examined the mediating effect of organizational learning (OL) in the relationship between entrepreneurial orientation (EO), and organizational performance (OP). Data were collected from managers and owners of manufacturing pharmaceutical SMEs in Indonesia. A sample of 340 was selected by using the purposive sampling technique. The results support in current empirical model confirming all the direct hypothesized relationships. The study results also revealed mediation of organizational learning in the entrepreneurial orientation and organizational performance relationship. Considering the association of the factors studied in the current research, the authors imply managers, owners to develop a learning-oriented environment. The implication sections provide further details based on the results.

Highlights

Siriattakul et al (2019) and Hair et al (2014) have regarded SMEs as facilitation units for employment generation, financial development and competitiveness worldwide
Keeping in view the objectives, the current study has examined the consequence of entrepreneurial orientation on organizational performance
Their study found theoretical consistencies of entrepreneurial orientation relationship in line with firm performance. Their argument supports the notion that EO will be important when associated with those firms whose workers are weak in learning. Based on these results from the existing literature, we proposed that entrepreneurial orientation will offer a huge contribution to organizational learning

Summary

Introduction

Siriattakul et al (2019) and Hair et al (2014) have regarded SMEs as facilitation units for employment generation, financial development and competitiveness worldwide. Pharmaceutical SMEs' performance is on the lower end. This indicates the lower organizational performance of Indonesian pharmaceutical SMEs. the contribution to GDP by pharmaceutical SMEs in Indonesia decreased from 0.80% in 2009 to 0.65% in 2014. The contribution to GDP by pharmaceutical SMEs in Indonesia decreased from 0.80% in 2009 to 0.65% in 2014 In such a situation, top management officials in the pharmaceutical sector have to focus on improving organizational performance. The current study has tested the mediating effect of organizational learning in the relationship between entrepreneurial orientation and organizational performance to forward strong empirical results to help support the pharmaceutical SME sector, which, as per Table 1, has a significant contribution to the Indonesian economy

Methods

Findings

Discussion

Conclusion