The Impact of Internal Factors on Small Business Success: A Case of Small Enterprises Under the Felda Scheme

Abstract

This study attempts to identify the antecedents of business success in the Malaysian perspective, with particular reference to small businesses under the Federal Land Development Authority (FELDA) scheme. Cross sectional data were collected from 199 small businesses operating under the (FELDA) scheme via questionnaire. The data collected were analysed using partial least square method. The empirical results indicated that only entrepreneurial competency and technology usage are related to successes of small businesses. However, this study found insufficient empirical evidence to support the relationship between marketing capability, financial resources, knowledge sharing, and business success. As this study was confined to the small businesses under the FELDA scheme, this provides valuable findings by uncovering the differences among the critical success factors due to the different reasons for formation of the small businesses. The insights gained from this study could facilitate industry practitioners to develop comprehensive business strategies and effective institutional policies to maintain the global competitiveness of small businesses under the FELDA scheme.

Effect of entrepreneur, firm, and institutional characteristics on small-scale firm performance in Ghana

“…However, findings on these factors have generally been inconclusive (Isaga, 2018) probably because operations of small businesses particularly for developing economies are complicated by variety of factors, and as a result, no extensive surveys are conducted that comprehensively explain all the variables (Braidford, Drummond, & Stone, 2017). Perhaps, it may also suggest, as we propose, that the dominant use of non-financial proxies such as customer satisfaction, corporate reputation, happiness, personal development, cultural, and social network (see Mohamad Radzi et al, 2017) to proxy firm performance or growth is fairly limited. According to Walker and Brown (2004), non-financial indicators of business growth are problematic to measure and subjective in nature.…”

“…Other authors such as Capron and Hulland (1999) and Galbreath (2005) also define resources as tangible and intangible assets that firms take ownership and control to produce the desired output in an efficient and effective manner. According to Mohamad Radzi et al (2017), tangible assets are limited to human, physical, financial, and technological resources. However, assets including knowledge, capabilities, skills, and reputations are termed as intangible assets.…”

“…However, assets including knowledge, capabilities, skills, and reputations are termed as intangible assets. Mohamad Radzi et al (2017) argue that firms have the desire to access and control resources either in the short or long term provided the resources will offer a competitive advantage over rivalries. These firms may have disparities in the access and control of the various resources, thus generating uniqueness in the different products or services they offer.…”

“…These firms may have disparities in the access and control of the various resources, thus generating uniqueness in the different products or services they offer. Thus, a firm's performance is determined from effective utilization of resources and capabilities possessed in the business (Saffu et al, 2012) since such resources are required for innovations to gain and sustain competitive advantage (Mohamad Radzi et al, 2017).…”

“…The critical factors that influence small-scale business growth have extensively been explored empirically in extant literature (Coad, Segarra, & Teruel, 2016;Ilaboya & Ohiokha, 2016;Kristiansen, Furuholf, & Walid, 2003;Mohamad Radzi, Mohd Nor, & Mohezar Ali, 2017;Murphy, Trailer, & Hill, 1996;Reynolds, Camp, Bygrave, Autio, & Hay, 2001;and Storey, 1994). Wide variety of factors that potentially influence firm growth range from entrepreneur's characteristics, firm characteristics (Abdul Wahab & Al-Damen, 2015) to issues related to the institutional localities in which the business functions (Isaga, 2018).…”