Malaysian SMEs Research Articles

Development of Entrepreneurial Competencies and Business Performance in SMEs: Between Government Support and Empowerment of Malaysian Women Entrepreneurs

The important aspect of business performance among women-owned SMEs in Malaysia is scarce and still underperformed. Hence, Malaysian SMEs needs to empower the entrepreneurial competencies among women-owned entrepreneurs and the support of Malaysian government. In this study, the questionnaire survey has been selected as the data collection method for this research. A total of 116 responses from the women-owned entrepreneur in Malaysia were obtained and analysis was carried out using Smart PLS software to generate findings. The results reveal that strategic competencies, opportunity competencies and conceptual competencies have significantly impacted the business performance of women-owned entrepreneurs among SMEs in Malaysia. The moderating effect of government support on the relationship between strategic competencies, opportunity competencies and business performance proved to be significant. Surprisingly, the interaction of government support between conceptual competencies and business performance is not supported in the findings. Hence, the current paper will further provide a women-owned SME with substantial information to focus on fostering entrepreneurial competencies within their respective companies to ensure peak business performance. Findings from this study anticipated being extremely useful to the Malaysian government, in specific Policy Makers. With these results, authorities will be better informed when implementing new strategies and programmes to enhance the skills of entrepreneurs, which will result in better business performance.

Rewards and Organizational Commitment: A Study among Malaysian SME’s Employees

This study aims to examine the relationship between rewards (intrinsic and extrinsic) and organizational commitment. A total of 429 employees from SMEs in Klang Valley, Malaysia participated in this study. The Pearson’s correlation analysis was employed to examine the relationships between the intrinsic and extrinsic rewards and the organizational commitment. Study revealed that the level of organizational commitment is moderately high among employees of SME in Klang Valley, Malaysia. Results also show that there is a significant and positive relationship between intrinsic rewards and organizational commitment; and a significant and positive relationship between extrinsic rewards and organizational commitment. A notable discovery from this study is that the employees’ demographic background influenced the level of organizational commitment. However, results shows that the gender and the number of times in changing jobs have no significant influence on the level of organizational commitment.

Identifying the driving and moderating factors of Malaysian SMEs’ readiness for Industry 4.0

ABSTRACT Despite the growing importance of SMEs’ readiness for Industry 4.0 (I4.0) to successful digital transformation, limited empirical studies have investigated the factors contributing to the I4.0 readiness of manufacturing SMEs. To fill this gap, this study examines the effect of organisational capabilities, perceived advantages, and market pressure on I4.0 readiness, the moderating effect of financial support, and SMEs’ readiness for I4.0 in Malaysia. This research contributes theoretically by extending the Unified Theory of Acceptance and Use of Technology and integrating it with the Resource-Based View and Dynamic Capability Theory to develop an SME-centric model for I4.0 readiness. Structural Equation Modelling from the Partial Least approach was performed to test the model by drawing on data from 110 manufacturing SMEs in Malaysia. Practically, the findings are instrumental in helping SMEs prepare for digital transformation. Policymakers may use the findings as a tool to identify where to prioritise efforts to accelerate SMEs’ readiness for I4.0.

Relational Capital and Performance: Empirical Evidence on the Services Sector of SMEs in Malaysia

Relational Capital and Performance: Empirical Evidence on the Services Sector of SMEs in Malaysia

The relationship between architecture, social, law and market in determine challenges of big data analysis for Malaysia SMEs

The relationship between architecture, social, law and market in determine challenges of big data analysis for Malaysia SMEs

Technology, Organization and Environment factor on Mobile Payment Implementation: Focus on SMEs in Malaysia

Technology, Organization and Environment factor on Mobile Payment Implementation: Focus on SMEs in Malaysia

Technology, organisation and environment factor on mobile payment implementation: focus on SMEs in Malaysia

Technology, organisation and environment factor on mobile payment implementation: focus on SMEs in Malaysia

Effect of intellectual capital on the business performance of SMEs in Malaysia

Effect of intellectual capital on the business performance of SMEs in Malaysia

Usage of Public Financial Support Services, Entrepreneurial Orientation and Sme Performance: the Case of Malaysia

Abstract SMEs have received much recognition as they continue to be the backbone in the development and economic growth of nations. This study intended to investigate how the entrepreneurial orientation moderates the relationship between the utilization of the financial support services and the firm’s performance. This study used Structural Equation Modeling to evaluate the impact of financial support services on SME performance. The sample for this study involved SMEs in Malaysia. The result indicates that financial support services significantly associated with the firms’ performance and entrepreneurial orientation failed to influence significantly the relationship between the usage of the services and the performance. The findings of this study could be useful for the government business support services providers to enhance further the quality of services and will provide an understanding of how effectively the characteristics of SMEs related to entrepreneurial orientation would help increase the effectiveness of the support services.

An Analysis of Malaysian SMEs' Access to Public Financial Assistance

The purpose of this paper is to identify the types of firms for which government financial support for SMEs is provided in Malaysia. The financial data of privately held and publicly traded companies are used and a probit model is estimated with qualitative variables as explained variables. The estimation results of the probit model reveal that the more Bumiputras are included as the ethnic composition of the board of directors. The more support they have received, the more fixed assets a company has, and the more support it receives. Firms with poor corporate performance tend to be more likely to receive financial assistance. Since the length of operation and ROE are not statistically significant, length of operation and ROE do not seem to have a significant effect on government financial support. The study finds that government financial support through development finance institutions is related to the ethnic composition of the board members. And the more difficult it is for SMEs to borrow from banks on a commercial basis, the more government financial support they receive.

Intellectual Capital and Firm Performance Correlation: The Mediation Role of Innovation Capability in Malaysian Manufacturing SMEs Perspective

Understanding of intellectual capital’s influence on the firm performance has received immense interest in recent years. In this view, the impact of various intellectual capital components, including human, structural, and relational capital, on the performance of small- and medium-sized Malaysian manufacturing enterprises were examined. A correlation between intellectual capital and firm performance were established based on the mediating role of innovation capability. To achieve this goal, a stratified sampling method was used wherein 262 participants’ responses from the focused manufacturing firms were obtained and analyzed via the structural equation model (SEM) and resource-based view (RBV). Statistical tools like SPSS.v25 and SmartPLS.v3 were used. The results showed that the relationship between intellectual capital and firm performance was strengthened due to the mediation of innovation capability, thereby gaining higher competitive advantages. It was asserted that the present comprehensive analyses may offer a useful information and guidance to the academics, owners/managers, and policymakers involving the impact of intellectual capital development towards improving the Malaysian SMEs performance.

Entrepreneurial Orientation, Market Orientation, Managerial Accounting and Manufacturing SMEs Satisfaction

From a management accounting perspective, this study aims at examining the relations of entrepreneurial and market orientations and SMEs satisfaction in terms of financial and non-financial performance. SEM was conducted on 107 responses including management accountants from the manufacturing SMEs in Malaysia. The results reveal a null relationship between entrepreneurial orientation and financial-performance satisfaction, while it shows a positive impact on non-financial performance. In contrast, market orientation affects financial and non-financial performance positively. However, to understand the null impacts, interviews were conducted with owner-managers of manufacturing SMEs in Penang. Based on the interviews and the analysis, practical implications are provided to entrepreneurs of SMEs, the Malaysian government, and researchers.

Measurement Validation of Factors Influence SME Business Performance in Malaysia

Organizations are increasingly under pressure to shift their production methods from traditional to sustainable, reinforcing the requirement to monitor their sustainability performance. The slow performance growth of Malaysian manufacturing companies remains a concern. The goal of this research is to highlighted the measurement used in the Malaysian SME context. Data were collected using survey method. A survey method was employed to collect a total of 1,071 responses in SME firms using proportional stratified sample technique. Using statistical packages for the social sciences (SPSS) version 27, this research focused on data validity and reliability. Findings of factor analysis confirmed 3 factors for the ICT adoption variable, were formed while 1 factor for the innovation variable, 4 factors for the competitiveness variable and 1 factor for the business performance. Only 2 items were dropped due to the weak loadings. Meanwhile the reliability analysis also indicates all the constructs and dimensions achieve good reliability value at more than 0.8. This research demonstrates the measurement validity and reliability of the research variables were inconsistent due to culture setting. This research highlighted the measurement used in the Malaysian SME context. The findings of this research withdraw a conclusion that the validity and reliability of item and construct of this research is proficient and consistent with the previous studies.

IMPACT OF SOCIAL CAPITAL TOWARDS STRATEGIC CAPABILITIES OF MANUFACTURING SMEs IN MALAYSIA

Research on SMEs in Malaysia has become more significant nowadays as SMEs in Malaysia contribute national income to the country. Internationalisation of SMEs is imperative as smaller firms operating international business today develop their own capabilities and competitive advantage. Thus, it is important for SMEs especially those in emerging countries like Malaysia to look into their social capital and put their efforts to strategize their capabilities to respond to the global competition and business opportunities. This study was conducted to examine the impact of social capital towards the SMEs capabilities before they adopt the best strategic approach to face challenge situations at hand. A quantitative approach was employed in this study and a total of 187 responses from manufacturing SME exporters were received and further analyzed using Partial Least Square (PLS) technique. The results demonstrated that social capital of manufacturing SMEs in Malaysia has significant impact only on innovation, marketing and technology capabilities but not market-linking and management capabilities.

Factors Influence Malaysian Small-Medium Enterprise to Engage in Facebook Marketing

Social media plays an important role as a marketing tool to promote Small and Medium Enterprises (SMEs’) businesses. Among the social media platforms, Facebook is the preferred advertisement tool for SMEs. It is because Facebook provides more features for SMEs to communicate with their customers such as by using direct messenger, comments, like, and share. SMEs engage in social media to lower the cost of advertisements, attract new customers through online contact, improve the interaction with customers or customer engagement, and create brand awareness of the company. Most of the past research has focused on the value of brand awareness and customer engagement on Facebook, however, there is a limited amount of research related to the value of cost-efficiency and attracting a new customer base especially in a developing country like Malaysia. As such, this study reviews the literature on social media marketing and factors influencing Malaysian SMEs to engage in Facebook online marketing. This study also proposes a conceptual framework on the factors influencing Malaysian SMEs to engage in Facebook online marketing.

The impact of customer knowledge management, TQM and marketing capabilities on product innovation performance of Malaysian SMEs: an empirical study

PurposeSeveral strategies and processes can help companies to enhance the success rate of new products. This study aims to identify a few strategies for that purpose represented by total quality management (TQM) practices, building knowledge and capabilities. Moreover, the current paper discusses the role of applying TQM practices and customer knowledge management in developing the marketing capabilities of the organizations.Design/methodology/approachThis study is a quantitative approach where the data collected from 141 manufacturing small and medium enterprises operating in Malaysia and partial least squares technique was used to test the hypotheses.FindingsThe findings of this study highly support all the proposed hypotheses and establish marketing capabilities as a facilitator in the relationship between TQM practices, customer knowledge management and product innovation performance. However, customer knowledge management and TQM were found not to have an impact on product innovation performance.Originality/valueThe introduced model contributes to enhancing the understanding of the impact of customer knowledge on the success of product innovation performance. The model further includes TQM as a process that helps the organization get customer satisfaction information. The incorporation of these two processes will support the organization’s capabilities in the innovation field.

Unveiling The Internal Forces Towards Digital Adaptation: A Change Perspective of Malaysian SMES

Digital transformation, one of the key areas of change management in the digital age, is defined as a process of changes by the means of using IR technologies in firm's operation. The extant literature suggests that implementation of digital technologies could improve communication, information flow, thus contributing towards value creation and firm performance. Notwithstanding of scarce financial, human resources and strategic capabilities to adopt new technologies among SMEs (Lee et al., 2020), the firm structure, which is more flexible as compared to large firms, offers opportunity in terms of quick decision making (Ghobakhloo & Ching, 2019) for the owner to adapt the firm's business model with market changes and implement necessary changes to sustain in the business. Moreover, previous studies indicate SMEs gained benefit from technology adoption. Nevertheless, transformation towards digitalisation requires a considerable judgement of decision, investment and effort by management and among the employees. Keywords: Digitalisation,Digital Transformation, Digital Strategy, SME, Change Management

Credit Evaluation by the Small-Medium Sized Enterprises: Maqasid Shariah Approach

This paper aims to examine the practice of credit evaluation by Islamic banking in evaluating financing proposals from the SMEs in Malaysia. Also, how the approach of Maqasid Shariah which encompasses of religion, life, lineage, intellect and property influencing the application of credit evaluation from the SMEs. This paper measures credit evaluation on Islamic banks based on review of literature; the inputs are extracted from the existing relevant studies on the subject matter. The findings reveal that that the elements of Maqasid Shariah are not being considered meticulously for credit evaluation processes. The Maqasid Shariah approach in credit evaluation could bring significant values for SMEs in securing financing. This novel study significantly focuses on how the SMEs in Malaysia process the credit evaluation based on the CAMPARI model while adapting the concept of Maqasid Shariah. As this conceptual paper focuses on the previous research and existing available data, the paper is a stepping-stone that enables the researchers to obtain an inclusive and complete perspective and solutions for both Islamic banking system and their customers.

Training Perception and Innovative Behavior of SME Employees: Examining the Mediating Effects of Firm Commitment

Many critical decisions about an employee’s innovative performance are significantly based on the training results, as they are accountable for a variety of behavioral-related consequences. Training is among the most important human resource management strategies. The aim of this study is to examine the relationship between employees’ perceptions of training and their innovative behavior in the Malaysian SME sector, as well as the mediating effect of affective and calculative commitment on this relationship. Structured questionnaires were used to collect the data. A total of 635 employees from 200 SMEs were selected through a stratified random sampling method, and structural equation modeling was applied to test the relationship. The findings of the study supported the hypothesized relationships, as training in Malaysia significantly engaged SME employees in innovative behavior. Furthermore, the study discovered that affective and calculative commitment have partial mediating effects on the association between training and innovative behavior. In the context of the SME sector, theoretical and managerial implications have been addressed. The originality of the study is that it examines the relationship between employees’ perceptions of training and their innovative behavior in SMEs. The relationship was measured using a multidimensional approach in the study. The research also adds to the body of knowledge by identifying the mediating effect of affective and calculative commitment.

Intention Factors of Adoption Halalan Toyyiban Risk Management Plan: Between Technology, Organizational, Environment and Halal Awareness as Mediator

The purpose of this paper is to answer the relationship between technology, organization, and environment, and the intention factors to adopt Halalan Toyyiban Risk Management Plan (HTRMP). The strongest factor will come out from this research which supports the intention to adopt halalan toyyiban risk management plan among food manufacturers SMEs in Malaysia. 120 samples of halal food manufacturer SMEs in Malaysia was used. The method used is a quantitative approach and using SEM-PLS to analyse the scientific data. The hypothesis of this research is to find the relationship between technology, organization, and environment and intention to adopt HTRMP, halal awareness as mediator. The results find that there are four positive relationships which were compatibility in technology, Organisational readiness and expected business benefit in the Organisation, and halal market in the environment are four criteria that have a favorable link with the intention adopt HTRMP. Compatibility also found as the most influential determinant for HTRMP adoption among food manufacturers SMEs. The data were collected during halal food events, Halal Festival (Halfest) and Selangor International Business Summit in Malaysia. The sample size is small. Findings can supervise the authority in successfully enhancing the application of HTRMP among food manufacturers in Malaysia. The food manufacturer can comply HTRMP accordingly with its benefit. The benefit of this research is to improvise the application of HTRMP among food manufacturers in Malaysia to increase and maintain the quality, safety and halal of their food products. Due to that HTRMP is lack study in halal management research from the previous journal. Keywords: Halal Management, Technology factors, Organization factors, Environment Factors, Mediator, SEM-PLS.