Entrepreneurial Orientation and Business Performance of Small and Medium Scale Enterprises of Hambantota District Sri Lanka

Abstract

Entrepreneurship has played an important role in economic growth, innovation, competitiveness and in poverty alleviation. This study investigated the degree of Entrepreneurial Orientation (EO) of twenty five manufacturing Small and Medium scale Enterprises (SMEs) in Hambantota District, Sri Lanka (HDSL) and the effects of EO dimensions including proactiveness, innovativeness, and risk taking to business performance. Interviews were used as the main instrument for data collection. Qualitative and quantitative techniques were applied for data analysis. Findings showed about 52% of SMEs in HDSL represented moderate level of EO. Proactiveness, innovativeness, risk taking and overall EO were significantly correlated with market share growth. Results further indicated there were positive correlations among proactiveness and EO with business performance. This study could be useful for policy makers to plan their activities towards entrepreneurship development of SMEs in HDSL.

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“…Several empirical studies (Wiklund & Shepherd, 2005;Lee & Lim, 2009;Fairoz et al, 2010;Frank, Kessler & Fink, 2010) prove the influence of entrepreneurial orientation and business performance. Meanwhile, the relationship of network capital with business performance shows sufficient evidence that there is a connection between the two constructs, as shown by studies conducted by several experts (Human & Naude, 2009;Kenny & Fahy, 2011;Ural, 2008).…”

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“…A thought came to carry out an in-depth inquiry to investigate as to whether the two concepts suggested any conceptual differences. For example, Venkatraman and, Ramanujam [29]; Fairoz, Hirobumi and Tanaka [36] and Aziz, Abdullah, Tajudin and Mahmood [25] consistently used the term business performance without clear conceptualization, which otherwise, could have given an insight to the issue at hand. Likewise, Dess and Robinson [37] Abu-Jarad, Yusof and Nikbin [28], Obiwuru et al [38] used the term organizational performance consistently through their studies.…”