The effect of market orientation as a mediating variable in the relationship between entrepreneurial orientation and SMEs performance

• Main Authors: Amin, M., Thurasamy, R., Aldakhil, A. M., Kaswuri, A. H. B.
• Format: Article
• Published: Emerald Group Publishing Ltd. 2016
• Subjects: HF Commerce
• Online Access: http://eprints.utm.my/id/eprint/73730/; https://www.scopus.com/inward/record.uri?eid=2-s2.0-84960847062&doi=10.1108%2fNBRI-08-2015-0019&partnerID=40&md5=d3e2ee7ac22283c16060e51f84d4be86

Purpose – This study aims to examine the effect of market orientation (MO) as a mediating variable in the relationship between entrepreneurial orientation (EO) and small and medium enterprises (SMEs)’ performance. Design/methodology/approach – A total of 500 SMEs in the manufacturing industry of food and beverages were involved in this study with a response rate of 117. Data collection was conducted in all states of Peninsular Malaysia including the northern, central, southern and eastern regions. Findings – The findings show that EO has a significant relationship with MO, and MO has a significant relationship with SME performance. MO will mediate the relationship between EO and SMEs’ performance. Practical implications – The higher the EO implemented in a business, the more willing a company will be to implement MO. This analysis shows that highly entrepreneurial firms tend to be highly market orientated and this affects SMEs’ performance. Originality/value – The results of this study show that the characteristic of entrepreneurial and MO practiced by SMEs in Malaysia has been significantly affected the SMEs’ performance. It indicates that EO offers a holistic and systematic model for supporting SMEs to build a well-maintained environment of MO and SMEs’ performance.