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Advances in Social Sciences Research Journal – Vol.7, No.12

Publication Date: December 25, 2020

DOI:10.14738/assrj.712.9289.

Abdulsamad, A., Ali, N. A., Mahomed, A. S. B., Hashim, H., Jandab, A., Al-Sharif, A. (2020). The Importance of Entrepreneurial

Orientation's Dimensions in Influencing the Organizational Performance of Food and Beverage SMEs. Advances in Social Sciences

Research Journal, 7(12) 81-99.

The Importance of Entrepreneurial Orientation's Dimensions in

Influencing the Organizational Performance of Food and Beverage

SMEs

Akram Abdulsamad

Ph.D. Candidate; School of Business and Economics,

UPM, Malaysia. Lecturer; Faculty of Economics

Political of science, University of Aden, Yemen.

Noor Azman Ali

Ph. D, School of Business and Economics,

UPM, Malaysia.

Anuar Shah Bali Mahomed

Ph. D, School of Business and Economics,

UPM, Malaysia.

Haslinda Hashim

Ph. D, School of Business and Economics,

UPM, Malaysia.

Abdulwahab Jandab

Ph.D. Faculty of Administration Sciences,

Albaydha University, Yemen

Abdulrahman M. Al-Sharif

Ph.D. CandidateSchool of Business and Economics,

UPM, Malaysia

ABSTRACT

The study is attempted to examine and analyze the important influence

of entrepreneurial orientation components - risk-taking,

innovativeness, and proactiveness- on the organizational performance

of Yemeni Small and Medium Enterprises within the food and beverage

industry. The model of study is tested on 459 owners/Managers of SMEs

by employing the analysis of Partial Least squares structural equation

modeling (PLS-SEM), as well as Importance-Performance Map Analysis

(IPMA). After utilizing the cross-sectional approach, the results

illustrated that the innovativeness and risk-taking have a significant

and positive impact on organizational performance, but their effect was

less than proactiveness. Moreover, the analysis of importance- performance pointed out that proactiveness more important than

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Advances in Social Sciences Research Journal (ASSRJ) Vol.7, Issue 12, December-2020

innovativeness and risk-taking in determining organizational

performance. The model of study expounded 34% of the whole variance

in SME's performance. Moreover, it provided the implications of

practical and theoretical.

Keywords: Strategic Orientation, Entrepreneurial Orientation,

Entrepreneurial Orientation Dimensions, Organizational Performance, SMEs

in Yemen, Resource-Based of View.

INTRODUCTION

The Small and Medium Enterprise (SMEs) have the capacity to provide more growth and

development opportunities to the world economy better than the large-scale industry [1]. More so,

SMEs create more employment openings rapidly than the bigger organizations. In addition to the

supplier role, they are playing for bigger companies [2, 3]. The importance attached to SMEs could

be drawn from Thailand’s novel and proactive SME sector which was the backbone of survival for

the country during the period of Asian economic crunch.

Although the importance of SMEs was emphasized, it is not sufficient If its performance is not

satisfactory, because the performance of the SMEs that actually contributes to economic

development [4]. In view of this argument, there cannot be a good contribution from SMEs unless

they perform satisfactorily. Therefore, SME's performance is a subject that deserves adequate

attention.

Some countries have a low-performance level of SMEs which may be a result of an increasingly

complex and changing business environment [5]. Moreover, [6] observed that in developing

countries, SMEs ignored the understanding of major capabilities for example entrepreneurial

orientation (EO) used to exploit the superior performance and increase their competitive

advantage.

The EO has a potential benefit, as it requires taking a risk to develop new products, services, and

markets, willingness to innovate, and proactively explore new opportunities and compete

successfully with competitors [7, 8]. Moreover, it represents a firm’s attitude toward

entrepreneurism, indicating how likely they are to make strategic decisions on new ventures [9].

The explanation of the association between both the EO-performance is routinely based on the RBV.

From that perspective, the EO comprises oftentimes an intangible resource, and these resources an

inimitable, valuable, rare, and un-substitutable [10, 11]. Thus, the diversity of the allocation for the

EO resource leads to distinction in the company performance [9, 12, 13].

Past studies that have been carried out based on the RBV theory, have shown that EO is one of the

valuable resources witch enhances the companies’ performance and innovativeness [9, 12, 13].

Furthermore, it has been argued by other researchers that EO enhances successful competition of

firms, while the unique capabilities are maintained to help them take advantage of opportunities,

and as well reduce the risk [14].