Influence of Quantitative approach on Entrepreneurial Orientation and Financial Performance under Small and Medium Enterprises (SMEs): A Case of the Ghanaian Manufacturing Sector
Author(s)
Charles Mawuena Gates , Dr. Mengyu Wu ,
Download Full PDF Pages: 16-29 | Views: 907 | Downloads: 271 | DOI: 10.5281/zenodo.3384392
Abstract
the fundamental objective of this study was to quantitatively examine the influence of entrepreneurial orientation on financial performance under Small and Medium Enterprises (SMEs) in Ghana. This study centred on the SMEs in the manufacturing subsector of the Ghanaian economy. The study employed a quantitative research approach because there was a need to generate numerical evidence and data sets that depict the current situation and trend of the SMEs operations in Ghana. Research data sample of two hundred and sixty-seven (246) SMEs owners and managers in the manufacturing subsector were used in the study. Data collected was coded using Statistical Package for Social Sciences (SPSS V22.0) and Structural Equation Modelling (SEM) was used to evaluate the proposed model for a clear understanding of the relationships that exist among SMEs and its constructs. The study found out that, there is statistically a significant relationship between entrepreneurial orientation and SME financial performance quantitatively. Specifically, the result highlights SME innovativeness, autonomy, proactiveness and competitive aggressiveness as the dimensions of entrepreneurial orientation that have a significant positive effect on SME financial performance in Ghana’s economy. The study seeks to discover how the dimensions of entrepreneurial orientation result in SME financial performance of manufacturing firms in Ghana. The manufacturing companies selected for this study are based in the capital of Ghana, Accra. These manufacturing companies were selected due to proximity and most importantly Accra seems to be the host of many small and medium enterprises (SMEs) in Ghana.
Keywords
Entrepreneurial orientation, Structural Equation Modelling, quantitative approach, financial performance, Small Medium Enterprises
References
i. Acheampong, G. (2019). The Nature of Corporate Digital Agricultural Entrepreneurship in Ghana. In Digital Entrepreneurship in Sub-Saharan Africa (pp. 175-198)
ii. Adams, S., Quagrainie, F. A., &Klobodu, E. K. M. (2017). Women entrepreneurial orientation, motivation, and organizational performance in Ghana. Small Enterprise Research, 24(2), 189-205.
iii. Aḥmad, N., & Hoffman, A. (2008). A framework for addressing and measuring entrepreneurship. OECD Publishing.
iv. Amankwah Amoah, J., Danso, A., & Adomako, S. (2019). Entrepreneurial orientation, environmental sustainability and new venture performance: Does stakeholder integration matter? Business Strategy and the Environment, 28(1), 79-87
v. Anderson, B. S., Kreiser, P. M., Kuratko, D. F., Hornsby, J. S., & Eshima, Y. (2015). Reconceptualizing entrepreneurial orientation. Strategic management journal, 36(10), 1579-1596.
vi. Bahula, M. A. (2012). The impact of entrepreneurial orientation on performance in the metals and engineering industry (Doctoral dissertation, University of Pretoria).
vii. Boling, J. R., Pieper, T. M., &Covin, J. G. (2016). CEO tenure and entrepreneurial orientation within family and nonfamily firms. Entrepreneurship Theory and Practice, 40(4), 891-913.
viii. Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative research journal, 9(2), 27-40.
ix. Bridge, S., Hegarty, C., & Porter, S. (2010). Rediscovering enterprise: developing appropriate university entrepreneurship education. Education+ Training, 52(8/9), 722-734.
x. Brouthers, K. D., Nakos, G., &Dimitratos, P. (2015). SME entrepreneurial orientation, international performance, and the moderating role of strategic alliances. Entrepreneurship Theory and Practice, 39(5), 1161-1187.
xi. Buame, S. (2012). Entrepreneurship: entrepreneurial education, venture creation, and SME management in Ghana.
xii. Carlsson, B., Braunerhjelm, P., McKelvey, M., Olofsson, C., Persson, L., &Ylinenpää, H. (2013). The evolving domain of entrepreneurship research. Small Business Economics, 41(4), 913-930.
xiii. Chin, W.W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295-336).
xiv. Chung-Wen, Y. (2008). The relationships among leadership styles, entrepreneurial orientation, and business performance. Managing Global Transitions, 6(3), 257.
xv. Cooper, D. R., & Schindler, P. S. (2011). Qualitative research. Business research methods, 4(1), 160-182.
xvi. Cooper, D. R., & Schindler, P. S. (2014). Business Research Methods. © The McGraw− Hill Companies.
xvii. Creswel, J. W. (2009). Research design: Qualitative, quantitative, and mixed methods approaches. Los angeles: University of Nebraska–Lincoln.
xviii. Creswell, J. W., Hanson, W. E., Clark Plano, V. L., & Morales, A. (2007). Qualitative research designs: Selection and implementation. The counseling psychologist, 35(2), 236-264.
xix. Davidsson, P. (2004). Researching entrepreneurship. New York: Springer.
xx. de Bakker, F. G. (2019). Book Review: Geoffrey Jones Profits and Sustainability: A History of Green Entrepreneurship.
xxi. Erastus, Y. E., Stephen, A., &Abdullai, I. (2014). Institutional framework for promoting small and medium scale enterprises in Ghana: Perspective of entrepreneurs. Australian Journal of Business and Management Research, 3(10), 28-45.
xxii. Eshima, Y., & Anderson, B. S. (2017). Firm growth, adaptive capability, and entrepreneurial orientation. Strategic Management Journal, 38(3), 770-779.
xxiii. Fairoz, F. M., Hirobumi, T., & Tanaka, Y. (2010). Entrepreneurial orientation and business performance of small and medium scale enterprises of Hambantota District Sri Lanka. Asian Social Science, 6(3), 34.
xxiv. Fernández-Mesa, A., & Alegre, J. (2015). Entrepreneurial orientation and export intensity: Examining the interplay of organizational learning and innovation. International Business Review, 24(1), 148-156.
xxv. Fisher, B., Kulindwa, K., Mwanyoka, I., Turner, R. K., & Burgess, N. D. (2010). Common pool resource management and PES: lessons and constraints for water PES in Tanzania. Ecological Economics, 69(6), 1253-1261.
xxvi. Fornell, C. and Larcker, D.F. (1981) Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18, 39-50.
xxvii. Frank, H., Kessler, A., & Fink, M. (2010). Entrepreneurial orientation and business performance—A replication study. Schmalenbach Business Review, 62(2), 175-198.
xxviii. Gautam, P. R. (2016). Entrepreneurial orientation and business performance of handicraft industry: A study of Nepalese handicraft enterprises. International Journal of Small Business and Entrepreneurship Research, 4(2), 48-55.
xxix. GIPC International IP Index Fact Sheet (2015)
xxx. Haider, S. H., Asad, M., & Fatima, M. (2017). Entrepreneurial orientation and business performance of manufacturing sector small and medium scale enterprises of Punjab Pakistan. European Business and Management, 3(2), 21-28.
xxxi. Hair et al. Multivariate Data Analysis: A Global Perspective. 7th ed. Upper Saddle River: Prentice Hall, 2009.
xxxii. Hair Jr, J. F., William, C., Babin, B. J., & Anderson, R. E. (2014). Multivariate Data Analysis Joseph F. Hair Jr. William C. Black.
xxxiii. Hartsfield, S., Johansen, D., & Knight, G. (2017). Entrepreneurial orientation, strategy, and marketing capabilities in the performance of born global firms. International Business: Research, Teaching, and Practice, 2(1), 12-38.
xxxiv. Hu, L. & Bentler, P. (1999). Cutoff criteria for fit indices in covariance structure analysis: conventional criteria versus new alternatives. Structural Equation Modeling, 6, 1-55.
xxxv. Jiang, X., Liu, H., Fey, C., & Jiang, F. (2018). Entrepreneurial orientation, network resource acquisition, and firm performance: A network approach. Journal of Business Research, 87, 46-57.
xxxvi. Joreskog, K. G., &Sorbom, D. (1993). LISREL 8: Structural Equation Modeling with the SIMPLIS Command Language Lincolnwood, IL, Scientific Software International, Inc.
xxxvii. Kirca, A.H., Jayachandran, S. and Bearden, W.O. (2005) Market Orientation: A Meta-Analytic Review and Assessment of Its Antecedents and Impact on Performance. Journal of Marketing, 69, 24-41.
xxxviii. Kline, R. B. (2005). Principles and practice of structural equation modeling (2nd ed.). New York: Guilford.
xxxix. Lisboa, A., Skarmeas, D., &Saridakis, C. (2016). Entrepreneurial orientation pathways to performance: A fuzzy-set analysis. Journal of business research, 69(4), 1319-1324.
xl. Lomberg, C., Urbig, D., Stöckmann, C., Marino, L. D., & Dickson, P. H. (2017). Entrepreneurial orientation: The dimensions’ shared effects in explaining firm performance. Entrepreneurship Theory and Practice, 41(6), 973-998.
xli. Matchaba-Hove, T., Farrington, S., & Sharp, G. (2015). The entrepreneurial orientation-Performance relationship: A South African small business perspective. The Southern African Journal of Entrepreneurship and Small Business Management, 7(1), 36-68.
xlii. Maxwell, J. A. (2010). Using numbers in qualitative research. Qualitative inquiry, 16(6), 475-482.
xliii. McDonald, Roderick P.,Ho, Moon-Ho RingoPsychological Methods, Vol 7(1), Mar 2002, 64-82
xliv. Moreno, A. M., & Casillas, J. C. (2008). Entrepreneurial orientation and growth of SMEs: A causal model. Entrepreneurship theory and practice, 32(3), 507-528.
xlv. Ntiamoah, E. B., Opoku, B., Abrokwah, E., Baah-Frimpong, G., & Agyei-Sakyi, M. (2014). Assessing the Contributions of Small and Medium Sized Enterprises to Ghana’s Economic Growth. International Journal of Economics, Commerce and Management UK, 2(11).
xlvi. Odoom, R., Narteh, B., & Rand, J. (2017). Branding and outcomes in small and medium-sized enterprises (SMEs): a resource–capability approach. Journal of Small Business & Entrepreneurship, 29(3), 175-192.
xlvii. Ovaska, T., & Sobel, R. S. (2005). Entrepreneurship in post-socialist economies. Journal of Private Enterprise, 21(1), 8-28.
xlviii. Quaye, D., Acheampong, G., &Asiedu, M. (2015). Gender differences in entrepreneurial orientation: Evidence from Ghana. European Journal of Business and Management, 7(12), 128-140.
xlix. Rehan, F., Block, J. H., & Fisch, C. (2019). Entrepreneurship in Islamic communities: How do Islamic values and Islamic practices influence entrepreneurship intentions? Journal of Enterprising Communities: People and Places in the Global Economy, Forthcoming.
l. Saunders, M. N., & Lewis, P. (2012). Doing research in business & management: An essential guide to planning your project. Pearson.
li. Schreiber, J. B., Nora, A., Stage, F. K., Barlow, E. A., & King, J. (2006). Reporting structural equation modeling and confirmatory factor analysis results: A review. The Journal of educational research, 99(6), 323-338.
lii. Schumacker, R. E. (2017). Interaction and nonlinear effects in structural equation modeling. Routledge.
liii. Semrau, T., Ambos, T., & Kraus, S. (2016). Entrepreneurial orientation and SME performance across societal cultures: An international study. Journal of Business Research, 69(5), 1928-1932.
liv. Shan, P., Song, M., & Ju, X. (2016). Entrepreneurial orientation and performance: Is innovation speed a missing link? Journal of Business Research, 69(2), 683-690.
lv. Short, J. C., Zachary, M. A., &Ketchen Jr, D. J. (2018). Entrepreneurial orientation rhetoric and franchise system size: The moderating role of military veteran recruitment. Journal of Business Venturing Insights, 10, e00097.
lvi. Sobel, R. S., & King, K. A. (2008). Does school choice increase the rate of youth entrepreneurship? Economics of Education Review, 27(4), 429-438.
lvii. Sobel, R. S., Clark, J. R., & Lee, D. R. (2007). Freedom, barriers to entry, entrepreneurship, and economic progress. The Review of Austrian Economics, 20(4), 221-236.
lviii. Wall, T. D., Michie, J., Patterson, M., Wood, S. J., Sheeran, M., Clegg, C. H., & West, M. (2004). On the validity of subjective measures of company performance. Personnel Psychology, 57(1), 95- 118. doi: 10.1111/j.1744-6570.2004.tb02485.x
lix. Wang, C. L. (2008). Entrepreneurial orientation, learning orientation, and firm performance. Entrepreneurship theory and practice, 32(4), 635-657.
lx. Watson, R Newby, A Mahuka. International Journal of Gender and Entrepreneurship 1 (1), 42-56, 2009. 67: 2009 Challenging the female under performance hypothesis.
lxi. Yu, W., Wiklund, J., & Pérez-Luño, A. (2018). ADHD symptoms, entrepreneurial orientation (Eo) and firm performance. In Academy of Management Proceedings (Vol. 2018, No. 1, p. 15046). Briarcliff Manor, NY 10510: Academy of Management.
Cite this Article: