Entrepreneurial orientation, market orientation and performance of SMEs in the manufacturing industry: Evidence from Ethiopian enterprises
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
Acknowledgements
The author would like to thank the staff members of the Department of Management, Haramaya University. The author would especially like to thank Mr Tesfaye Feyissa and Mr Andualem Tolessa for their collaboration in gathering the data and for their valuable comments on the manuscript. The author has greatly benefited from the comments and suggestions of Dr Mathew Hughes. And above all, special thanks are extended to the Editor-in-Chief, Professor Joseph Sarkis, and anonymous reviewers of Management Research Review for their valuable comments that helped improve the quality of this paper.
Citation
Buli, B.M. (2017), "Entrepreneurial orientation, market orientation and performance of SMEs in the manufacturing industry: Evidence from Ethiopian enterprises", Management Research Review, Vol. 40 No. 3, pp. 292-309. https://doi.org/10.1108/MRR-07-2016-0173
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited