Entrepreneurial orientation and business performance - the role of intangible strategic resources: an empirical study on SMEs in Sarawak

• Main Author: Toh, Kah Hwat
• Format: Thesis
• Language: English
• Published: Universiti Malaysia Sarawak, (UNIMAS) 2015
• Subjects: H Social Sciences (General)
• Online Access: http://ir.unimas.my/id/eprint/10753/1/Kah%20Hwat.pdf; http://ir.unimas.my/id/eprint/10753/

The central theme of this study was that sustainable superior business performance is achievable. This study advocates that with the presence of intangible strategic resources (ISRs), small businesses such as SMEs are able to sustain their business success. The availability of external assistances or non-strategic resources, such as government provided capital funds and training programs can facilitate SME’s business but not an assurance for its success and sustainability. A number of legendary riches start from scratch with nothing but self-reliance have shown how their businesses prosper and sustain by leveraging on intangible strategic resources, such as hard-work, thrift, and entrepreneurial values. Intangible strategic resources are a firm’s non-observable resources which include individual’s perceptions, leadership skill, personal values, company reputation, product reputation, employee knowhow and organizational culture, and are capable of generating and sustaining high level economic rents. Strategic resources are characterized as being simultaneously valuable, rare, imperfectly imitable and non- substitutable. This study attempts to construct a model based on two concepts the Resources- Based View (RBV) and Entrepreneurial Orientation (EO), with a focus on explaining how sustainable superior business performance is achievable through enhancing a firm’s internal strengths or capabilities. Specifically, intangible strategic resources (ISRs) as driver of performance and mechanism of sustainability, when leveraged well will lead to higher firm-level EO and successful business performance. The results, based on the data drawn from 267 SMEs randomly selected from Sarawak, supported the hypothesis that there was an empirical positive relationship between firm-level entrepreneurial orientation (EO) and performance of the business (BP). Also supported are: (1) Hypothesis that owner-manager’s perception of resources availability (PRA) is significantly and positively related to firm-level EO; and (2) Hypothesis that organizational culture of adhocracy (AOC) positively influences the firm-level EO, Unexpectedly, hypotheses of transformational leadership skill (TLS) and individualistic personal values (IPV) are not empirically supported – are statistically insignificant and negatively related to firm-level EO. Finally, this study is significant: (1) in its capability to explain how sustainable superior business performance is achievable - in an attempt to clarify why and how some firms are successful and sustainable while others are not; (2) in its contributions in three aspects – theoretical, managerial, and methodological; and (3) in extending the existing literature of EO and business performance of SMEs in Sarawak.