Business Performance Of Small And Medium Enterprises Research Articles

Improving Business Performance of SMEs Using SDGs Components and Business Strategy

This study aims to describe and analyze the correlation of the SDGs components related to business strategy and performance of SMEs. Sustainable Development Goals (SDGs) were conceptually used as basic variables in improving the business performance of small and medium enterprises (SMEs) in order to reduce poverty alleviation. The type of this research is explanatory research. The number of samples in this study were 170 respondents of SMEs determined by structural equation model (SEM) as the method of analyzing data, which is operated by AMOS. The population is 295 SMEs. The result of this study shows that the greatest influence of performance of SMEs was business operational strategy of 6,365, and the smallest effect was on SDGs economic indicators to business operational strategy of 1,022. In this case, it can be stated that the sustainable development goals (SDGs) have a significant influence on the business operational strategy and business performance of SMEs. For small and medium entrepreneurs in Yogyakarta, seeing SDGs as a development goal will affect their operational business strategy, especially related to economic variables. Keywords: business performance, business strategy, poverty alleviation, small and medium enterprise (SMEs), SDGs

The influence of entrepreneurial orientation on business performance of SMEs: Evidence from Kathmandu, Nepal

The purpose of the study was to investigate the impact of entrepreneurial orientation comprising autonomy, innovation, networking, and pro-activeness on business performance in Nepalese context. The literature of entrepreneurial orientation concerning to business performance depicted distinct directions with divergent and unsettled evidences. This research was conducted to address the research objective and for testing hypotheses. Thus, this study employed a descriptive and causal-comparative research approach, through cross-sectional data to gather information from participants to address research issues and objectives. A structured questionnaire of total 425 adopting the convenience sampling technique distributed among the targeted respondents in Kathmandu and received only 410 useful questionnaire for analysis. The findings of the study revealed that entrepreneurial orientation comprising autonomy, innovation, networking, and pro-activeness behavior found positively associated with the business performance of small and medium enterprises (SMEs) in Kathmandu, Nepal. There was a positive impact of entrepreneurial orientation on SMEs' business performance. It showed that better entrepreneurial orientation leads towards better business performance. This research contributes for better understanding of the association between entrepreneurs’ orientation and business performance with their effect for business performance. This study establishes significant benchmark to a number of stakeholders consisting entrepreneurs, educators, academic institutions, regulators, and policymakers for a better understanding and optimum execution of the research outcomes to prepare effective policies for entrepreneurship development.

Organizational Practices’ Role in Managing Open Innovation and Business Performance

Given the ever-changing world of technological advances, and due to the fact that business entities strive for efficiency and cost reduction, open innovation (OI) has become the focus of academic and scholarly discussions. Furthermore, to increase their competitiveness, small and medium enterprises (SMEs) have started implementing OI practices. This study aims to investigate the impact of SMEs’ internal organizational practices on OI and the impact of the latter on SMEs’ business performance. This quantitative study, which was based on gathering insights from SMEs, sought to answer two research questions related to the effects of organizational practices on the adoption and management of OI processes in SMEs and the role of OI in accelerating the business performance of SMEs. The findings revealed that not all SMEs’ internal organizational practices have a positive impact on both OI and SMEs’ business performance. This study is among the earliest studies in the UAE and GCC region to explore the impact of specific internal organizational practices on SME OI adoption and its business performance. The present study contributes theoretically and practically to OI literature and assists SME managers in evaluating their internal organizational practices’ suitability for OI adoption.

Entrepreneurial Orientation in the Business Profit Development Center of SMEs in Java: The Critical Role of Islamic Values

Small and medium enterprises (SMEs) are urged to enhance their business operations in the rapidly evolving technological landscape. The emphasis on entrepreneurial orientation has played a crucial role in both economic and societal development. Islamic values, which are rooted in fundamental religious principles, have significant potential to shape entrepreneurial behaviors. This research aims to provide a framework that enhances the performance of SMEs. The results of this research emphasize the significant role of Islamic values in amplifying entrepreneurial orientation. This research reveals that adopting Islamic principles has the potential to significantly improve the business performance of SMEs in Central Java. In addition, SMEs benefit from a significant boost in their performance by embracing Islamic values, such as proactiveness, a commitment to learning, and the willingness to take risks.

The effect of Financial Literacy, Access to Finance, and Financial Risk Attitude on the Culinary Business Performance of SMEs in Yogjakarta

Individuals, households, and business entities that have met the criteria as businesses have SMEs as productive businesses. Micro, small, and medium enterprises (SMEs) significantly contribute to a region's economic development. Financial literacy, access to finance, and financial risk attitude are important in improving business performance. This study aimed to examine the effect of financial literacy on access to finance, financial risk attitude, and culinary business performance. Test mediating roles access of finance and financial risk attitude on the impact of financial literacy on the performance of the MSME culinary business in Yogyakarta.
 Statistical analysis model using mediation regression. The research sample is the Actor Culinary business SMEs in Yogyakarta. Sampling technique with purposive sampling. Respondents were 135 SME Culinary Entrepreneurs. Mediation regression analysis tool using PLS. The research results show that: 1) Financial literacy positively affects culinary business performance. 2) Financial literacy has a positive effect on access to finance. 3) Access to finance mediates the effect of financial literacy on culinary business performance. 4) Financial literacy has a positive effect on financial risk attitudes. 5) Financial risk attitudes mediate the effect of financial literacy on culinary business performance.
 The research results recommend the importance of increasing financial literacy and ease of access to finance. Analyzing risk is needed for SME culinary business actors to improve business performance and sustainability.

A Corporate Social Responsibility (CSR) Model to Achieve Sustainable Business Performance (SBP) of SMEs in the South African Construction Industry

This paper purposes to develop a corporate social responsibility (CSR) model to guide small and medium enterprises (SMEs) in the South African construction industry (SACI) towards sustainable business performance (SBP). A theoretical CSR model was developed from the literature and validated through Partial Least Squares Structural Equation Modelling (PLS-SEM), using primary questionnaire data obtained from 110 SMEs in the SACI, who are registered on the construction industry development board (cidb) register of contractors between Grade 1 and 6 general building (GB) and/or civil engineering (CE). The PLS-SEM results indicate that CSR drivers influencing the CSR practices of SMEs, along with CSR implementation challenges experienced by SMEs, influence the perception of SMEs pertaining to the relationship between the integration of CSR and SBP all of which influences the CSR activities considered by SMEs to achieve SBP, thus implying that the holistic adaption of the PLS-SEM (CSR model) by SMEs in the SACI equates to more SBP. However, SMEs practicing CSR activities to achieve SBP are subjected to specific CSR: drivers and implementation challenges as well as SME owner perceptions.

Do innovation and proactiveness impact the business performance of women-owned small and medium-scale enterprises in Vietnam? A study using the PLS-SEM approach

Purpose: This study aims to identify and evaluate the relationship between factors and the business performance of women-owned small and medium enterprises (SMEs) in Vietnam focusing on the dimensions of entrepreneurial orientation factors such as innovation, risk-taking and proactiveness.
 Design/Methodology/Approach: Data were obtained from 350 female entrepreneurs of SMEs in Vietnam using a structured questionnaire. The partial least squares structural equation modeling method (PLS-SEM) was applied to find the cause-and-effect relationship between exogenous and endogenous variables.
 Findings: The results show that the business capacity of business owners, the quality of human resources, access to finance, social capital, entrepreneurial orientation and government policies positively impact the enterprise's business performance. The relationship between the three dimensions of entrepreneurial orientation and business performance is examined. In detail, proactiveness and innovation have a positive relationship while risk-taking negatively affects the business performance of women-owned SMEs.
 Conclusion: The study has shown the factors affecting the business performance of women-owned small and medium-sized enterprises in Vietnam and at the same time proved that EO is a multidimensional concept when the dimensions of EO tend to have different effects on business performance.
 Research Limitations and Implications: The research may lack a comparison in the field of SMEs to deeply understand the cause-and-effect relationship between exogenous and endogenous variables. Therefore, researchers are encouraged to test the proposed propositions further.
 Practical Implications: Research results provide insight for businesses, state management agencies, credit institutions and associations on policy-making and appropriate solutions to support and develop the enterprise.
 Contribution to Literature: The important impact of proactiveness and innovation on SMEs' business performance opens a new door to more research in business orientation.

The Mediating Role of Marketing Innovation Between Internal Social Media Utilization and Business Performance of Smes in Saudi Arabia

Purpose: The usage of social media (SM) by small and medium enterprises (SMEs) received relatively less attention and the findings in the literature are mixed in terms of the effect of SM on SME performance. The purpose of this study is to examine the effect of SM utilization on SME business performance (SMEBP) in Saudi Arabia. Theoretical Framework: Based on the resource-based view, this study proposed that SM internal utilization (SMIU) affects positively the SMEBP and marketing innovation (MI). MI is expected to affect the SMEBP and mediate the effect of SMIU on SME performance (profitability (PR) and business growth (BG). Design/Methodology/Approach: The population of this study is the SMEs in Al-Riyadh city in Saudi Arabia. A simple random sampling is deployed. The data was collected using a questionnaire. A total of 451 respondents representing SMEs participated in this study. Findings: The finding was derived using Smart PLS version 4. The findings showed that SMIU affected positively PR and BG of SME and MI. MI affected positively the PR and BG of SME and mediated partially the effect of SMIU on PR and BG of SME. Research practical Implication: Decision makers are advised to deploy SM more effectively and to create a rewarding culture for innovative ideas to improve performance. Originality/Value: This study helps to enhance the understanding regarding the role of marketing innovation and social media internal usage in improving the performance of SMEs in emerging economies.

Understanding the Motivations for SMEs in South Africa to Adopt Social Media

Since the covid-19 pandemic in 2020, many businesses have relied on social media to stay abreast with the latest news, developments and to predict the future world of business. Many countries around the world instigated lockdown restrictions to curb the spread of the covid-19 virus, and social media platforms were very popular tools used for spreading the news. The proliferation of social media has also increasingly drawn the attention of Small and Medium Enterprises (SMEs) in South Africa to improve their efforts of sustaining their businesses. Social media platforms have become popular in the business environments for their ability to increase market reach, transfer knowledge, and sustain the business. While many benefits of social media to enhance business performance have been studied, there are also skeptics on data privacy issues that social medial brings to the business. In the SME sectors in South Africa, social media are adopted due to their cost effectiveness and ease of use. However, little is known about the effect of data privacy issues on SME business performance. The literature of social media adoption indicates that the older generation of SME owners are skeptical about sharing their confidential business insight on social media platforms. This is despite the availability of many other literature studies that report on the increase of social media studies to enhance business sustainability. This study aims to produce knowledge for understanding the key motivations of SMEs to adopting social media despite the existence of data privacy issues on social media. Qualitative interviews were conducted with 13 SME entrepreneurs who were purposively selected based on their knowledge of social media, experience of its application in the business, industries and premises of the SME business in South Africa. The results of the interviews indicated that SMEs are generally aware of the data privacy issues surrounding the use of social media, and the adoption rate differs from younger and older generation of SME entrepreneurs.

SME Performance Through Blockchain Technologies

ABSTRACT Blockchain technology has the potential to impact the performance of small-and-medium enterprises (SMEs). A theoretical model using Technology-Organization-Environment framework and Resource-based View was developed to examine Blockchain-driven SME business performance. The model was empirically tested using structural equation modeling techniques on data gathered from 320 practitioners in Nigeria, Ghana and Kenya. The technological and organizational contexts for Blockchain influenced organizational commitment while top management support for Blockchain influenced organizational transparency, both of which influenced Smart SMEs resulting in enhanced performance. Social media visibility moderated the effect of Smart SMEs on performance. The findings offer several implications for research and practice.

MANAJEMEN RANTAI PASOKAN PADA KEGIATAN KEWIRAUSAHAAN DAN INOVASI PRODUK SEBAGAI PENENTU KINERJA UKM

The purpose of this study is to provide practical and theoretical insights into how small and medium enterprises (SMEs) adjust and further develop entrepreneurial activities, product innovation and SME business performance in the city of Bandung. This study used quantitative methods by using questionnaires for data collection. The number of samples used was 119 respondents using purposive sampling techniques. Partial least Square (PLS) is used for data processing. Based on the results of data analysis, it is implied that entrepreneurial competence has a significant effect on business performance, entrepreneurial competence has a significant effect on product innovation. However, product innovation does not have a significant effect on SME business performance.

Digital Marketing Development Model through Digital Literacy Mediation to Improve SME's Performance

The objective of this research is to undertake the digital literacy competence among the SME (Small and Medium Enterprises) actors and to answer the previous research evidence that digital literacy is still under study; therefore, digital literacy among the SMEs a cluster of MSME, natural dyes Batik Kebon Indah Bayat Klaten is used as location of this research. Method of the study was carried out by census to all members of cluster batik natural dyes in Bayat Kebon Indah Klaten. All 186 batik members were withdrawn as respondent of this study, the reason for withdrawing all cooperative member of Kebon Indah because they were engaged in digital marketing activities to promote their natural dyes batik products. The engagement in social media to promote their products was vulnerable to digital illiteracy exposures. Digital literacy is a mediating variable bridging the gap between digital marketing capability and SME business performance. The findings reveal that digital marketing capability has a significant impact on SME business performance, digital literacy has a considerable effect on SME's business performance, and digital literacy significantly impacts digital marketing capability. Implication of the study found out that digital literacy prevented the respondents to believe in hoax, several deceiver’s efforts of business deceptions, therefore digital literacy strengthened them to be cautious in managing their business.

The role of supply chain management in entrepreneurial activities and product innovation on SMEs performance

The purpose of this research is to provide practical and theoretical insights about how small and medium enterprises (SMEs) adapt and further develop entrepreneurial activities, product innovation and SME business performance This study used a quantitative method using a questionnaire for data collection. The research data developed by distributed online questionnaires by social media. The number of samples used was 230 respondents using a purposive sampling technique. Partial Least Square (PLS) is used for data processing by SartPLS 4.0. Based on the results of data analysis it is concluded that entrepreneurial competence has a significant effect on business performance and entrepreneurial competence has a significant effect on product innovation. Product innovation has also a significant effect on the performance of SME businesses.

Effect of Information and Communication Technologies(ICT) as Innovation Tool on Business Performance: Evidence from Pakistan

With the increase in innovation and competition among different businesses, Importance of ICT cannot be denied in the modern age. The objective of this study is also to evaluate the importance of ICT in business performance of Small and Medium Enterprises (SMEs) especially as an innovative tool for the business. Most of the studies in literature review suggest that ICT has played very effective role in enhancing business performance of SMEs. Most of the firms have grown innovatively due to the implementation of ICT. . For reliability and validity, the evaluating scales used were exposed to the Confirmatory Factor Analysis (CFA) with Maximum Likelihood Technique. Different tests were applied like the Structural Equation Model (SEM) on 186 Punjab-based SMEs. Results indicate that ICTs facilitate innovation favourably and substantially. Business performance was also significantly impacted by innovation and the usage of ICTs. This means that those in charge of making decisions ought to put special consideration to how they handle these critical factors for business performance. This study also recommends that firms must implement ICT as their innovative tool to compete with other firms.

DOES MARKETING CAPABILITIES MEDIATE ON THE ICT’S ADOPTION AND BUSINESS PERFORMANCE OF THE SMEs IN OMAN? CONCEPTUAL REVIEW

The main purpose is to review the empirical evidence and summarize the marketing capabilities' mediating effects on the adoption of ICTs and business performance of the Small and Medium Enterprises (SMEs) in Oman and develop a conceptual framework. Data were collected from the existing literature from different online sources. The study review findings revealed a significant gap in the literature regarding the full understanding of the simultaneous relationship among ICTs, marketing innovation, and business performance in SMEs. Most studies have concentrated on analyzing and discussing only one or two of these phenomena at a time. However, the other studies that have examined the simultaneous relationship among the three variables mentioned above have generally ignored the component of marketing capabilities, focusing instead on the idea of innovation in its broader sense. The present study findings also establish a lack of or insufficient empirical studies that broadly examine the contribution of ICTs adoption among SMEs and its effect on companies’ capabilities, such as marketing capabilities, and consequently its effect on business performance, especially in developing countries. Therefore, the present study is motivated to develop a conceptual framework for measuring the mediating effect of the marketing capabilities, ICTs adoption and business performance of SMEs in Oman one of the developing countries.

The Relationship between Business Excellent Model and Business Performance of Small and Medium Enterprises in Malaysia

Small and Medium Enterprises (SMEs) have been identified as a critical economic development engine globally, including Malaysia. SMEs' contribution to the economy includes their share of total establishments, employment, Gross Domestic Product (GDP), and total export. SMEs comprise 97.4 percent of business establishments, provide 59 percent of total employment, and are the major contributor to economic growth. Despite SMEs' significant proportion and pivotal roles in economic development, their business performance is still debatable. The SMEs' business performance has shown slow growth while recording low productivity compared to large firms. Thus, this paper seeks to develop a broadly-based Business Excellent Model (BEM) that is exclusively and mutually for the business performance of SMEs by investigating each criterion of the Business Excellent Model. The development of the BEM was done based on the findings by reviewing literature from the local and global context concerning the issue. Previous studies revealed that SMEs need the necessary BEM to act as a catalyst for their business performance. The SMEs need to have seven criteria which comprise (a) leadership, (b) strategy, (c) information, (d) customer, (e) workforce, (f) process, and (g) results that are exclusively and mutually for SMEs' business performance. Finally, the conclusion from the literature help to assess the critical issues of slow-growing and unproductive SMEs in Malaysia. Furthermore, understanding every criterion of the BEM would also ascertain which criteria should be included in the BEM for SMEs. Keywords: Small and Medium Enterprises, business performance, Business Excellent Model

Serene Business Environment Moderated by Competitive Intensity on Performance of Small and Medium Enterprises (SMEs) in Malaysia

Effect of business environment on the performance of small and medium enterprises (SMEs) has been widely studied. However, researches on the effect of serene business environment, as well as moderator on performance of SMEs are lacking. Therefore, this research investigated effect of competitive intensity on the relationship between serene business environment and performance of SMEs in Malaysian context. Accordingly, a cross sectional survey design was adopted, and data of 148 respondents was collected and analyzed using descriptive and inferential statistics – frequencies, percentages and partial least square – structural equation modelling (PLS-SEM). From the findings, Malaysia’s serene business environment is an important driver of SMEs’ performance. Yet, the research found that competitive intensity is an important factor that strengthened causal relationship between economic environment and performance, as well as between regulatory environment and performance. However, the effect of competitive intensity in strengthening causal relationship between financial market environment and performance, as well as between technological environment and performance was not found. The current results brought a new insight in this field of study. Therefore, several research implications and recommendations to business managers and policy makers were highlighted.

The impact of financial literacy on business performance in small and medium enterprises: evidence from Kegalle District in Sri Lanka

This study has been conducted to achieve the objectives of examining the level of financial literacy based on demographic factors and identifying the impact of Financial Literacy on Business Performance of Small and Medium Enterprises (SMEs) in the Kegalle district of Sri Lanka. Thus, a quantitative study has been conducted based on Prospect Theory, and Exchange theory. There is a dearth of studies related to these variableswithin Sri Lanka. This study is carried out as a solution to the empirical gap. The sample size was 100 SMEs in the Kegalle district and the representative purposive sampling method used to collect the required information. This study has been used primary data through questionnaires after conducting factor analysis, reliability and validity test. The objectives have been achieved through descriptive analysis, correlation, and regression analysis since the past empirical review suggested using this analysis to examine the relationship. The findings of the study revealed that there is a positive relationship between financial literacy and business performance. Accordingly, independent variables such as technical financial knowledge, financial market knowledge & financial management skills have an effect on the business performance of SMEs and among these variables, technical financial knowledge and financial management skills are the most influential factors which affect the business performance. As the explanation of prospect theory, this study also concluded that there should have good financial knowledge among owners to make decisions. This study also concluded that owners or employees should have higher education level. As the explanation of exchange theory, it should exchange information or knowledge among employees and recruit more skilled employees. The research provides insight into the business owners of SMEs & policymakers that how they can make better decisions to improve business performance through financial literacy. Accordingly, the business owners and policymakers should arrange training programs to improve the knowledge of financial literacy.

The impact of e-marketing orientation, technological orientation and learning capacity on online SME performance

Currently, Internet penetration is accelerating across the country in Bangladesh, which, in particular, has led to the simultaneous development and growth of online businesses. Due to increased internet availability and accessibility, a number of small and medium enterprises (SMEs) continue to operate using an Internet-driven online platform. This context requires a research effort to investigate the underlying factors that might influence the business performance of online SMEs. Thus, the aim of the study is to examine the impact of e-marketing orientation (EMO), technology orientation (TO), and learning capability (LC) on online SME performance in the context of Bangladesh. In this study, the dependent variable is online SME performance, whereas the independent variables are EMO, TO and LC. To achieve this objective, the study developed a questionnaire based on past literature. Following a non-probability random sampling approach, 320 survey forms were distributed among online SME owners using the online survey system (Google form), and finally 156 responses were realized as fully complete responses. Hence, the study sample size is n = 156. SPSS version no. 26 was used to analyze the correlation among independent and dependent variables and to test the hypotheses. During statistical analysis, the 5% significance level is used as a threshold value to accept hypotheses. The study results show that EMO, TO and LC have a statistical and significant impact on online SME performance. Finally, this paper seeks to outline several important implications for online SME owners, as well as suggest several directions for future research.

ICT Usage, Bounded Rationality and Business Performance of SMEs in Sri Lanka

This study endeavours to investigate empirically how Information and Communications Technology (ICT) usage affects the bounded rationality and business performance of Small and Medium Enterprises (SMEs) in Sri Lanka. The data collection has been done with 400 owners of SMEs in Sri Lanka by employing telephone and face to face interviews using a structured questionnaire. The Partial Least Squares-Structural Equation Modelling (PLS-SEM) was utilized to analyse the data. The empirical results discovered that the different dimensions of ICT usage such as infrastructure, applications, policy, human resources, and mobile technology have a negative impact on bounded rationality and positive effects on the business performance of SMEs in Sri Lanka. Thus, the study recognizes that several dimensions of ICT usage make proper information flow to pull out information asymmetry and reduce the bounded rationality of SMEs, thereby increasing the business performance of SMEs in Sri Lanka.