Performance Of Small And Medium Enterprises Research Articles

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.

Effect of internal barriers on innovation performance in embryonic SMEs in Malaysia

Manufacturing small and medium enterprises (SMEs) need to propel their creativity and innovativeness to enhance their innovation performance in the competitive and fast-changing environment. The current environment has transformed the internal working pattern, structure, and communication system to survive the rough business ecosphere. Consequently, SMEs encountered innumerable barriers to achieve the innovation performance and the SMEs should recognise the internal barriers so that they are able to accelerate their innovation performance. Therefore, this study aims at examining the internal barriers namely constraint in financial resources, constraint in technology, and constraint in human resources that hamper the innovation performance among the Malaysian manufacturing SMEs. This study embarked on two phases of data collection. First phase includes a series of semi-structured interviews with 15 participants from 5 SMEs via snowballing technique to gather their insights on internal barriers that impede innovation performance. For second phase, the survey method was adopted, and 217 SMEs responded to the survey. All the responses were analysed using SmartPLS technique. The interview findings demonstrate that all the internal constraints are indeed important for SMEs to grasp and serve as the obstacles for innovation performance. Nevertheless, from the quantitative analysis, only financial constraints serve as the significant barrier that impede innovation performance. To summarise, this research produces insights on decisive proof regarding internal barriers that inhibit the manufacturing SMEs to achieve innovation performance.

Implication of internet of things (IoT) on organisational performance for SMEs in emerging economies – a systematic review

The object of this research is the implementation of Internet of Things (IoT) and its effect on organizational performance for Small and Medium Enterprises (SMEs) in emerging economies. SMEs in emerging economies are faced with low level of performance due to technological constraint, inadequate skilled human resource, lower entrepreneurial capabilities and management systems, the deficiency of available information, inadequate use of Information Technology, poor quality products and lack of strategic long-term plans. Systematic literature reviews approach was used to discover, assess and synthesize findings of all relevant individual research on fourth industrial revolution (4IR), IoT, organization performance and SMEs topics. 461 articles were found, and 60 articles were used as sample of this study. Findings of this study established that implementation of IoT positively affects performance for SMEs in emerging economies. Results also shows that financial, technological, and operational risks are major risks faced by SMEs in implementing IoT technologies in emerging economies. The essence of the results is to contribute to current body of knowledge by giving interesting insights in the form of a framework on how IoT technologies can be applied in enhancing SMEs performance in emerging economies. This is achieved by making SMEs aware of its potential benefit by providing some knowledge on securing financial resources, and ability to analyse external environment, and to shed more light on the benefits and opportunities that these new tools offer and how it can subsequently improve organization performance for SMEs. Most articles used systematic literature review were from developed economies as there was limited literature which speaks about IoT and SMEs performance in emerging economies. The study therefore focused on IoT and how it can improve SMEs’ organizational performance in emerging economies.

Efforts to enhance SMEs' motivation and performance through environmental uncertainty in Aceh Province

This research focuses on the impact of environmental uncertainty on small and medium enterprises (SMEs) in Indonesia, particularly in Aceh Province. These businesses are vital for sustaining the country's economy. The study investigates how SMEs in this region can expand internationally despite facing environmental uncertainties. It emphasizes the importance of motivation in helping these enterprises overcome challenges and uncertainties, such as the COVID-19 pandemic and global conflicts like the Russia-Ukraine war. The study employed a survey method, gathering primary data through questionnaires distributed to a target population of SMEs in Aceh Province, involving 1,245 businesses. A purposive random sampling technique was used to select 275 respondents. These respondents were chosen because their businesses have shown growth and resilience amidst various uncertainties. The findings reveal that both environmental uncertainty and motivation significantly influence the performance of SMEs in Aceh Province. Moreover, motivation plays a crucial role in mediating the effects of environmental uncertainty on SME performance. This suggests that in the face of uncertainties in the business environment, strong motivation drives SMEs to innovate and sustain their operations.

The Organizational Culture Strategy SMEs During Economic Crises

The importance of organizational culture in the operation and performance of businesses has been widely acknowledged, but there is inconsistency in findings about the impact of culture on organizational performance across studies. This study aimed to achieve two objectives: first, to establish the relationship between the quality of accounting information systems (AIS), organizational culture, and the financial performance of small and medium enterprises (SMEs) in Vietnam; and second, to survey the organizational culture strategy of Vietnamese SMEs in the context of economic crises. The study survey was conducted in May 2023 and involved 242 SMEs in Vietnam. The research model was tested using Smart PLS. The results suggest that AIS has a positive relationship with both organizational culture and the financial performance of SMEs. However, organizational culture only affects financial performance related to organizational adaptability during a crisis. Moreover, a flexible, external adaptation, and balanced cultural approach strategy has a significant impact on the financial performance of SMEs. During a crisis, managers expect employees to adapt in order to achieve strategic goals and plans while simultaneously balancing stability, engagement, and employee satisfaction to achieve organizational effectiveness. Doi: 10.28991/ESJ-2023-07-06-015 Full Text: PDF

Strategy for Improving the Performance of Culinary SME Actors in Langsa City, Indonesia

Small and Medium Enterprises (SMEs) are pivotal in propelling the Indonesian economy. The stability and sustainability of economies in different regions have been greatly affected by the worldwide economic issues that have emerged due to the COVID-19 pandemic. One of the identified repercussions can be witnessed in the culinary sector of small and medium-sized enterprises (SMEs) in Langsa City. Thus, this study examines the effect of internal and external factors on the performance of Small and Medium Enterprises (SMEs) operating in the culinary sector within Langsa City. Additionally, this research aims to evaluate and propose strategies for enhancing the performance of SMEs in the culinary industry by employing a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis framework specifically tailored to the context of Langsa City. The present study uses a qualitative research design utilizing a case research approach. Data is gathered by distributing questionnaires, conducting in-depth interviews, and assessing validity through source triangulation. Based on the findings of the study, it was determined that the Internal Factor Analysis Summary (IFAS) and External Factor Analysis Summary (EFAS) about the performance evaluation of Small and Medium Enterprises (SMEs) operating in the culinary sector in Langsa City have not yet reached their maximum potential. This conclusion was drawn through the application of SWOT analysis. This observation may be due to the outcomes of the Cartesian diagram utilized in the SWOT analysis. The chart reveals that quadrant II exhibits the highest cumulative score, suggesting several risks encountered by the business stakeholders. However, the culinary small and medium-sized enterprise (SME) actors have internal strengths. To boost the performance of Small and Medium Enterprises (SMEs) in the culinary sector, it is imperative to employ a Strengths-Threats (S-T) approach that focuses on implementing product diversification techniques.

Institutional Ownership, Capital Structure and Performance of SMEs in China

This article examines the relationship between ownership, leverage, and performance for Chinese small and medium enterprises (SMEs). Our study sheds light on how institutional ownership affects the performance of Chinese SMEs. We use agency and the pecking order perspective as background theories for analysing the relationships between institutional ownership, capital structure, and firm performance. We use a range of regression estimations for robustness checks and include Quantile regression, static and dynamic panel regression models, and a two-step system Generalized Method of Moments (GMM) approach to explore data covering 2009–2015. Our findings show that institutional investor’s ownership affects the performance of Chinese SMEs positively and significantly. The negative relationship between leverage and performance indicates the dominance of family ownership in Chinese SMEs, where firms rely more on retained earnings for financing, which aligns with the pecking order theory (POT) perspective. The results also suggest that institutional ownership could mitigate agency issues in Chinese SMEs. JEL Classification: G30, G38, G39

Peningkatan Kinerja UMKM Melalui Peran Strategi Pemasaran di Desa Lilibooi, Leihitu Barat, Kabupaten Maluku Tengah

Lilibooi Village is in West Leihitu District, Central Maluku Province. Lilibooi Village has great natural potential so that apart from attracting tourists to visit because of its natural beauty, it is also because of its large natural resources in the agricultural sector. Small and Medium Enterprises (SMEs) in this village are already running but are still on a small scale and need to be improved. There are many challenges faced by SMEs today, including SMEs in Central Maluku, especially in Lilibooi, which are still faced with a lack of understanding about the importance of information technology, online promotions, business locations and product quality. Marketing strategies are needed to increase the sales volume of each SME player and introduce SME products more widely. The aim of this community service activity is to answer the problems faced by SMEs in Lilibooi Village by providing outreach and sharing knowledge so that SME actors in the village can apply it to improve SME performance. The socialization material provided is related to several issues that are not yet understood so that it can encourage SME marketing. The result of this service is the absorption of knowledge and skills from SME players in understanding the role of marketing strategy through material in the form of applying technology to SME operations, promotions, business locations and product quality. The development of SMEs can have an influence on improving their performance. With this marketing strategy effort, it can increase the income of SME players.Keywords: Product Quality, Business Location, Promotion, Information Technology, SME

THE MEDIATING AND MODERATING EFFECT ON SMES' PERFORMANCE: DOES RELIGIOSITY MATTER?

Small and medium enterprises (SMEs) are entities managed and controlled by the owners. The performance of the owners strongly reflects the business performance of the SMEs. That is also the way of looking into the study aiming at analyzing the performance of SMEs from an Islamic perspective, which can be viewed from the owners' religiosity and financial behaviour. This framework is still rarely found in shari'a economics literature. This also involves further consideration of the need for Islamic values on the performance of small businesses in countries with Muslim-majority. Using a survey research design, 238 small business owners and managers participated in responding to a self-registered questionnaire research instrument. Using PLS-SEM, the research instrument has been tested for its validity and reliability and the variable's influence. The result proves that religiosity does not directly affect the performance of SMEs but indirectly influences the performance through financial behaviour. It means that religiosity forms good financial behaviour, and then the financial behaviour increases business performance. This study also finds that gender moderates the effect of religiosity on the behaviour of SME owners or managers. Furthermore, business age reduces the effect of financial behaviour on performance. The results of this study warn that old businesses should not make SMEs owners feel comfortable and resistant to change unless they fail to gain good business performance.

Internal factors of entrepreneurial and business performance of small and medium enterprises (SMEs) in East Java, Indonesia

The analysis conducted in this empirical study is the direct and indirect impact of internal entrepreneurial factors on the performance of small and medium enterprises. These factors were identified from previous studies from various countries, such as entrepreneurial-innovative work behavior, entrepreneurial leadership, entrepreneurial self-efficacy, and entrepreneurial motivation, by taking the research object of small-medium enterprise owners in Java. East, Indonesia. Descriptive statistics and structural equation models were used to analyze the research data. Samples were taken with uncontrolled quota sampling techniques. The research data was collected by distributing questionnaires online with the Google form application and offline. The total respondents were 575 small-medium enterprise owners. The test results showed that internal factors such as entrepreneurial self-efficacy, motivation, and leadership could increase business performance significantly.In contrast, entrepreneurial-innovative work behavior cannot significantly increase business performance. Other test results showed that: 1) entrepreneurial self-efficacy significantly improved entrepreneurial motivation; 2) entrepreneurial leadership significantly improved innovative entrepreneurial behavior; 3) entrepreneurial motivation partially mediated the influence of entrepreneurial self-efficacy on business performance; 4) innovative entrepreneurial behavior did not mediate the influence of entrepreneurial leadership on business performance. The contribution of the results of this study provides additional empirical studies on the role of entrepreneurial leadership, which significantly increases innovative entrepreneurial behavior. There is a lot of potential to develop business existence through entrepreneurial leadership through innovative behavior in entrepreneurship. Another contribution of this study is that entrepreneurial self-efficacy is a dominant predictor of business performance in SMEs and significantly increases entrepreneurial motivation. These findings reveal the importance of self-efficacy for SMEs because high self-efficacy for business actors is expected to increase entrepreneurial self-efficacy and teamwork motivation in helping to achieve business performance.

Integrated lean-green practices and supply chain sustainability framework

Integration of lean-green practices has benefited companies in many ways, particularly the large ones. Small and Medium Enterprises (SMEs), as key players within supply chains, should also be encouraged to apply the lean and green practices to support the large enterprises in the supply chain. However, it remains all time challenging for SMEs that operate with limited resources, and often emphasize on short-term goals with rapid turnaround. The impact of green-lean practices on sustainability performance has been investigated earlier, however further study is needed to understand the phenomena in context of SME supply chain. This study examined the moderating effects of top management commitment and leadership (TMCL) and organizational culture transformation (OCTr) on the relationship between Lean Practice (LP) and Green Practice (GP). Further, it investigated the moderating effect of both policy initiative (PI) and collaborative synergy (CS) on the relationship between GP and sustainability performance. The survey-based study analyzed the data from 345 Indonesian manufacturing SMEs using structural equation modeling (SEM) with Smart-PLS. The findings suggest that GP mediates LP to improve sustainability performance of SMEs. TMCL facilitates significantly the adoption of integrated lean and green practices. Meanwhile, OCTr, PI, and CS did not have a significant moderating effect. It means that OCTr does not significantly moderate lean practices for the adoption of green practice. Similarly, results demonstrate that neither PI nor CS moderate the correlation between green practice and sustainability performance of supply chain in manufacturing SMEs. The findings help SME owners or managers to build a comprehensive model of a lean-green system to direct SMEs to achieve sustainable development.

Determinants of Big Data Analytics (BDA) Adoption among Small and Medium Enterprises (SMEs)

Businesses must be innovative in the current "knowledge-based economy" if they intend to create and maintain a competitive advantage over rivals. The adoption of big data analytics (BDA) is thus revolutionary for precise decision-making and top performance in the present industrial environment. BDA application has attracted interest particularly due to the prospects and benefits that may be realized from its utilization in both academic and practical circles. Nevertheless, its adoption in small and medium-sized (SME) businesses is unknown thus far, prompting this study. To determine the determinants influencing SME preparedness to adopt BDA, the current study used the Technology Organization Environment (TOE) framework. The results supported the positive effects of BDA adoption on organizational marketing and financial performance in SMEs. Hence, understanding the factors influencing BDA acceptance enables managers to undertake the right initiatives, which are essential for its successful implementation. The outcomes also render it possible for BDA service providers to draw in and spread its prevalence among SME businesses.

The effect of digital transformation and innovation on SMEs’ performance in times of COVID-19

This study examines the impact of digital capabilities and digital orientation on the digital transformation and digital innovation of small and medium enterprises (SMEs) during the COVID-19 pandemic. In addition, this study assesses how the role of digital transformation and digital innovation mediates the relationship between digital capabilities, digital orientation, and SME performance during the COVID-19 pandemic. Using a sample of 247 SMEs managers, data were analyzed using the structural equation modeling with a partial least square approach. The findings demonstrate the significant and positive influence of digital capability and orientation on SMEs’ digital transformation and innovation during the pandemic. Additionally, the study confirms that digital transformation and innovation positively affect SMEs’ performance during the pandemic. Furthermore, the study reveals that digital transformation and innovation mediate the relationship between digital orientation and capability on SMEs’ performance during the pandemic. However, digital innovation was not found to significantly mediate the link between digital capability and SMEs’ performance.

The Impact of Web Analytics Tools on the Performance of Small and Medium Enterprises

In the era of data analytics, the use of web analytics tools is widely spread among Small and Medium Enterprises (SMEs), especially in the e-commerce sector, to analyze web usage data and measure website performance due to the several features it provides. Most web analytics studies were conducted based on marketing rather than a managerial point of view. Therefore, there is a necessity to study the impact from a managerial perspective by exploring the impact on financial and non-financial performance and the decision-making process. This study assessed the impact of web analytics tools on the overall performance of SMEs, targeting Saudi SMEs and considering the lack of web analytics studies in this sector in Saudi Arabia. The sample involved eight Saudi SMEs who participated by answering interview questions, which were analyzed using thematic analysis. The findings demonstrated four main themes: the current web analytics tools used by Saudi SMEs, the motivations behind their use, and their impact on SMEs' performance and decision-making. The results showed that these tools positively affect the overall performance of SMEs. Google Analytics (GA) was the tool most used by the sample. Seven motives were discovered that encourage SMEs to use web analytics tools. This study also addressed the common Key Performance Indicators (KPIs) used by the participants. Concerning decision-making, it was found that web analytics tools affected and supported SMEs' decisions. Furthermore, this study evaluated the role of Zid, the Saudi e-commerce platform for data analytics and performance measurement.

Linkage of Digitalization and Perceived Organizational Performance of Small and Medium Enterprises

The purpose of this empirical research is to assess the impact of digitalization on perceived organisational performance in all areas of Small and Medium Enterprises (SMEs) in India’s rubber products manufacturing industry. The study employs a quantitative research method with an explanatory research design. The study’s primary data is gathered through surveys of top-level officials and IT managers from SMEs in the rubber products manufacturing industry. The normality and reliability of the data are assessed first using SPSS 22, followed by assessments of internal consistency, divergent validity, convergent validity, and discriminant validity using maximum likelihood estimation of the CFA. The structural equation modelling approach was chosen as the statistical instrument that enables researchers to look at complex interactions between several variables in parallel based on the nature of the research questions, the data that are available, and the theoretical underpinnings of the study. It is identified through this study that major digital technology measures such as Usefulness of Web Portals (UWP), Customer Interface through Web Portals (CIWP), and Major Functionalities of Web Portal (MFWP), Use of Online Activities in Marketing Efforts (OAME), Online Advertisements and Promotion (OAP), Availability of Trained and Skilled Employees (ATSE), and Technological Resources (TR) have a statistically significant impact on the performance of SMEs. The study results provide policymakers with insights into how to provide special incentives and exemplary services to SMEs in order to promote the digitalization in the rubber products manufacturing industry. This study expands the scope of the investigation of the adoption and diffusion of digital technology by measuring the impact of a broad range of digital technologies on SMEs.

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.

ICT's Impact on SMEs in Zanzibar: A 360-Degree Appraisal

The integral role of Information and Communications Technology (ICT) in global socio-economic growth is universally acknowledged. Zanzibar, too, recognizes ICT's potential to foster enterprise development. This study conducts a focused analysis of the symbiotic relationship between ICT and small and medium enterprises (SMEs) in Zanzibar, encompassing ICT's significance, adoption challenges, and its impact on SMEs' growth. Employing a descriptive research design, data collection involved a structured questionnaire distributed to a random sample of 100 respondents. Analysis was conducted using the Statistical Package for Social Science (SPSS), yielding insights communicated through percentages, tables, and graphs. The findings underscore ICT's pivotal role in SME development, with a substantial proportion deriving benefits from its integration. Key variables—ICT's importance, implementation, and influence—are identified as catalysts for improved SME performance. However, challenges persist, including limited expertise, slow internet, setup costs, and security concerns, underscoring the need for refined ICT strategies. Recommendations echo the importance of continuous ICT enhancement, advocating for advanced tools to secure competitive advantages. Moreover, policy interventions by governmental bodies and private entities like the Chamber of Commerce are deemed necessary to facilitate SME education, training, and advisory services. This collective effort promises not only individual business growth but also national economic advancement.In summation, while ICT is a linchpin, factors like technology, customer care, and trust are equally vital. Governmental support for SMEs' effective ICT integration emerges as a core necessity, propelling Zanzibar's SMEs towards amplified growth within an increasingly digital landscape.

Impact of Some Selected Determinants on SMEs Performance: A Study on Jhenaidah District of Bangladesh

Small and Medium Enterprises (SMEs) play a critical role in any emerging economy. These sectors are now considered as the main engine of the economy in Bangladesh. The principal objective of this study is to identify, measure and compare the impact of some selected determinants on SMEs performance in Bangladesh. The study employed qualitative interviews with the owners/employees of SMEs dealing with i) Tailoring ii) Flower cultivation iii) Restaurant business iv) Auto rice mill business v) Jewelry vi) Nursery vii) Clinic business 8. Handicrafts business ix) Rice cultivation and x) Banana cultivation in Jhenaidah district of Bangladesh. This is a survey-based study and the data were collected from 101 respondents using a structured questionnaire. The data collected for the study have been processed using MS Excel 2007. This study examined six determinants such as entrepreneurial competency, marketing capability, financial resources, modern technology, product quality, and investment capacity to determine the SMEs’ performance in terms of profit. Seven hypotheses were developed to reach the objectives in the study. The collected primary data were analyzed by applying basic statistical tools. The results of the study revealed that the most significant determinants that affect the performance of SMEs in Bangladesh were entrepreneurial competency, financial resources and investment capacity respectively. Policymakers and owners of SMEs should take necessary steps in light of the findings of the study to improve the performance and ensure the sustainable growth of SMEs sectors in Bangladesh.

Encouraging SMEs performance through entrepreneurial intentions, competencies, and leadership: serial mediation model

PurposeThe study aims to investigate the effect of entrepreneurial leadership (EL), competencies (ECs) and intentions (EIs) on enterprise performance (EP) via entrepreneurial resilience (ER) and risk-taking propensity (RTP).Design/methodology/approachData were collected from 403 early-stage small and medium enterprise (SME) owners in Pakistan at two-time intervals and were analyzed using AMOS 22.FindingsAll predictors (i.e. EIs, EL and ECs) positively affected EP and ER, except for EL and ER. Furthermore, RTP and ER were serially mediated in linking EIs and ECs with EP but could not establish a link between EL and EP.Research limitations/implicationsThe findings reveal that the Pakistani government and business owners must focus on SMEs’ sustained development and prioritize ECs.Originality/valueThis paper is unique in nature, as understanding EIs, EL and ECs in a holistic framework has never been tested before in relation to EP.

CEO's industry experience and emerging market SME performance: The effects of corruption and political uncertainty

We examine how Chief Executive Officer (CEO) industry-specific experience influences firm performance in small and medium enterprises (SMEs) in emerging markets. Drawing on the upper echelons perspective and learning theory, we propose an inverted U-shaped relationship between an SME CEO's industry-specific experience and firm performance. We also argue that country corruption and political instability moderate this relationship, resulting in lower performance for SME CEOs with little industry experience or many years of industry experience in countries with high corruption or political instability. We test our hypotheses using data from the World Bank's Enterprise Survey of firms in emerging economies from 2006 to 2019. The results support our hypotheses that corruption and political instability primarily hurt the performance of SMEs with CEOs having very long industry experience. We discuss implications of this research for scholars studying SMEs in lesser-developed institutional environments and how leaders may influence SME performance.