The Effect of Motivational Entrepreneurship on Business Performance of SMEs Moderated by Process Innovation

Abstract

This study aims to determine the effect of motivational entrepreneurship to the innovation process and the performance of entrepreneurs. The population in this study are two centers of business in Bandung: Sentra Rajut Binongjati (the knitting business center) and Sentra Kaos Suci (the t-shirts business center). The samples in this study are 154 SMEs owners. Data analysis techniques use Partial Least Square -Structural Equation Modeling. The results show that motivational entrepreneurship which consists of achievement motivation, risk propensity, and self-efficacy have significant effects either on the innovation process and the business performance. It indicates that the achievement motivation, willingness to take risks and self-efficacy can generate innovation processes and improve business performance.

Impact of Entrepreneurial Self-Efficacy and Entrepreneurial Motivation on Micro and Small Business Success for Food and Beverage Sector in East Java, Indonesia

“…The most prominent aspect of business success by F&B business people who are respondents to research is the acquisition of business profits, while aspects of business development need to be improved (Table 6). Entrepreneurial motivation in this empirical study is seen from financial, social, service, and self-fulfillment motives, and the dominant basis compared with others is the financial aspect and self-fulfillment aspect (Table 5); this supports Chittithaworn et al (2011) and Machmud (2017). Motivation moves entrepreneurs to display behavior towards achieving specific goals, such as business growth.…”

“…The results of the study are in line with Amit and MullerAmit (1995), who argue that "when both forces ("pull" and "push") are at work, one might expect superior performance". Kisker (2016) examines the impact of motivational factors consisting of independence, need for achievement, social recognition, and financial rewards, which have been shown to have a positive and significant effect on the survival success of a business, while Muthalib and Yulianti (2015), Machmud (2017), and Budiman and Pangestu (2018) show that EM has a significant effect on both the innovation process and business performance. These motivational factors are the cause of one's satisfaction.…”

“…Referring to Huarng et al (2012), entrepreneurial motivational (ME) is operationally defined as a condition from within the individual (internal) that encourages individuals to consciously carry out activities to achieve the desired goal in business. EM measurement refers to Kisker (2016) and Machmud (2017), which includes the following aspects: financial motivation, social motivation, service motivation, self-fulfillment, or achievement motivation.…”

“…Zaini et al (2016) mentioned increasing entrepreneurial intentions through unique mental and emotional processes. This becomes a strong predictor of one's actions to start a new business (Bernardus et al 2020) which ultimately affects the growth and performance of SMEs (Lampadarios 2017;and Machmud 2017) because a person's self-efficacy affects the course of action to be chosen, such as trying to be persistent and tenacious, so that the business carried out is successful.…”

“…Another factor that influences entrepreneurial success is entrepreneurship motivation (EM). EM can influence entrepreneurial intentions and decisions to start a business (Kristiadi et al 2016;Santoso and Oetomo 2018;and Barba-Sánchez and Atienza-Sahuquillo 2012) and affect the innovation process and business performance and success (Machmud 2017;and Budiman and Pangestu 2018). Hartman and Herb (2015) mention that motivation and success are considered essential entrepreneurship components.…”