Linking entrepreneurial competencies, innovation and sustainable performance of manufacturing SMEs

Abstract

PurposeThe purpose of this study is twofold: to examine the impact of entrepreneurial competencies and innovation on manufacturing small and medium-sized enterprises' (SMEs) sustainable performance and to explore the role of innovation as a mediator on the relationship between entrepreneurial competencies and manufacturing SMEs' sustainable performance.Design/methodology/approachData collected from manufacturing SMEs in Malaysia were analysed via the partial least squares-structural equation modelling (PLS-SEM) approach.FindingsThe results reveal that entrepreneurial competencies play a robust and noteworthy role in promoting innovation and the sustainable performance of manufacturing SMEs, respectively. Further, innovation has a partially mediated effect on the link between entrepreneurial competencies and manufacturing SMEs' sustainable performance. Manufacturing SMEs' aspirations to be the first to market with new products are reflected in these SMEs' implementation of positive entrepreneurial competencies or capabilities which enable them to scan the environment to identify high-quality business opportunities and respond through these SMEs' Research and Development (R&D) activities to create products that provide real benefit to customers' needs. Hence, these SME's seize the market opportunities.Practical implicationsManufacturing SMEs' sustainable performance should be strengthened by linking entrepreneurial competencies with innovation to nurture greater agility to respond quickly to change and market demands. These SMEs should conduct tactical meetings on a regular basis to discuss current projects and assess critical indicators, as well as to identify and test fresh ideas for innovation and new business ventures in order to achieve sustainable performance in challenging business environments.Originality/valueBy applying the resource-based view (RBV) theory and the triple bottom line (TBL) framework into a single framework, this study highlights the role of innovation as a meaningful mediator between entrepreneurial competencies and manufacturing SMEs' sustainable performance. As exploration of this relationship has been very limited, the study makes a novel contribution to the extant literature.

Is knowledge management a missing link? Linking entrepreneurial competencies and sustainable performance of manufacturing SMEs

“…ECs were assessed using 14 measures from Man et al (2008) that evaluated opportunity, strategic and conceptual abilities. Many prior investigations, for example (Al Mamun et al, 2019;Al Koliby et al, 2022a;Aftab et al, 2022), have been empirically confirmed. Similarly, KM was assessed using 12 items from Al Koliby et al (2022b) that evaluate knowledge acquisition, dissemination and application.…”

“…Hence, it is imperative for organizations to possess the requisite competencies to foster growth and progress (Al Mamun et al, 2018). Certainly, it is evident that managers and proprietors of manufacturing SMEs possessing robust ECs prioritize long-term performance objectives, emphasizing factors such as environmental sustainability, community well-being and public safety, as highlighted by Al Koliby et al (2022a). The empirical findings indicated that ECs are a notable predictor SP (Seraj et al, 2022).…”

“…However, there is a conspicuous lack of focus on exploring the potential mediating role of KM in this relationship. ECs play a crucial role in aligning the strategic objectives of SMEs with their long-term performance targets, with a focus on environmental sustainability, community well-being and public safety (Al Koliby et al, 2022a). However, the lack of knowledge in this area leads some entrepreneurs to become non-innovative and risk-averse, have diminished enthusiasm for their work, reduced productivity and a reluctance to acquire new skills (Pepple and Enuoh, 2020).…”

“…Notably, previous research has indicated that Malaysian SMEs often grapple with limited resources, a dearth of expertise, a skilled workforce, governmental support and financial backing (Tehseen and Ramayah, 2015;Al-Koliby et al, 2022a). Consequently, enterprise managers and owners should proactively enhance their knowledge and skills through training, workshops and awareness seminars on KM.…”

Developing Female Sustainable Entrepreneurial Intentions through an Entrepreneurial Mindset and Motives

“…Furthermore, environmental dynamism reinforces the beneficial association between ECs and performance [22]. The findings of [23] acknowledged that ECs played vital roles in fostering SMEs' innovation and long-term success. Additionally, innovation partially moderated the relationship between ECs and manufacturing SMEs' sustainable performance.…”