Abstract
Malaysia, like many developing countries, is encouraging local businesses to take greater role in the management of its economy. While incentives and deregulation measures are offered, variations in performances still persist. Researchers have long been interested in explaining the variance in firm performance, as even those firms operating in the same industry and in the same business environment show differences in performance outcomes. Numerous paradigms in the literature have been employed to explain the variance in business performance, including the Classical Industry Organisation, the Revisionist school, the New Industrial Organisation school, the PIMS paradigm, the Austrian school, and the Resource-based school. This paper investigates the combined effects of managerial characteristics of owners/managers and business strategy on the firm performance of Chinese small and medium enterprises (SMEs) in Malaysia. Using multivariate relationship, the results of the study did not show any significant correlation between the managerial characteristics of the owners/managers and firm performance outcomes among the Chinese entrepreneurs. Nevertheless, a significant amount of variance in performance outcomes can be explained by firm strategy. Furthermore, several significant correlations were found between managerial characteristics and business strategy.
Highlights
small and medium enterprises (SMEs) account for 99.2% of businesses and 65.1% of the total workforce in Malaysia (Leong, 2006; The Star Business, August 8, 2006)
Factors relating to business failure are many, but those relating to business management and the business experience of top managers, and turbulent environmental factors account for most business failures
Researchers have been long interested in explaining the variance in firm performance, as even those firms operating in the same industry and in the same business environment show differences in performance outcomes
Summary
SMEs account for 99.2% of businesses and 65.1% of the total workforce in Malaysia (Leong, 2006; The Star Business, August 8, 2006). Research on Chinese SMEs in Malaysia has been scant; no study, conducted to investigate the impact of managerial characteristics, business strategy, and business environment in combination, has been uncovered to-date in the literature. These factors are reflected in the business performance of a firm, and here, a research model is proposed to study the relationships. Are selected managerial characteristics of age, education level, and tenure of owners/managers associated with the business strategy choice of Chinese SMEs?. 2. Are selected managerial characteristics of age, education level, and tenure of owners/managers associated with business performance outcomes of Chinese SMEs?. Are business environmental factors moderating the relationship between business strategy and business performance outcomes of Chinese SMEs?
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