Entrepreneurial orientation, market orientation and performance of SMEs in the manufacturing industry

Bereket Mamo Buli

Management Research Review, 2017, vol. 40, issue 3, 292-309

Abstract: Purpose - The Purpose of this paper is to examine the difference in the performance of Small Business using Entrepreneurial and market orientation. There is solid empirical evidence confirming the importance of small and medium-sized enterprises (SMEs) in economic development. Using entrepreneurial and market orientations, this paper investigates the extent to which this strategic orientation contributes to the superior performance of manufacturing SMEs. Design/methodology/approach - A total of 171 SME managers participated in the survey research. Multiple and linear multiple regression were applied to test the hypotheses. Findings - The empirical result reveals that integrating entrepreneurial and market orientations into the operation of SMEs contributes to superior performance, which in turn enables them to thrive in institutionally complex and economically turbulent environments. Except for innovativeness, each dimension of entrepreneurial orientation along with market orientation has a positive influence on business performance of small businesses. Practical implications - Developing economies see SMEs as a path out of poverty, thereby realizing industrialization and sustainable growth. There is a keen interest to adopt proactive policies so as to create competitive domestic industries. Conversely, this can only be realized if states develop policy measures that prioritize or at least emphasize on highly growing SMEs rather than creating jobs that are neither productive nor decent. Originality/value - The present paper confirms previous findings and contributes additional evidence that suggests working on entrepreneurial and market orientations of SMEs will improve performance and compensate the multi-dimensional constraints imposed by the existing market in developing economies. The finding of this study offers important insights for managers and policymakers.

Keywords: Performance; SMEs; Developing economies; Ethiopia; Innovative; Entrepreneurial and market orientation (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:mrrpps:mrr-07-2016-0173

DOI: 10.1108/MRR-07-2016-0173

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