Entrepreneurial Competencies and SMEs’ Performance in a Developing Economy
Abstract
:1. Introduction
2. The Literature Review and Hypotheses Development
2.1. The Concept of Entrepreneurial Competencies
2.2. The Domain of Entrepreneurial Competencies
2.3. The Concept of SMEs’ Performances
2.4. Entrepreneurial Competencies and SMEs’ Performances
2.5. Relationship Competency
2.6. Organizing and Leading Competency
2.7. Learning Competency
2.8. Opportunity Competency
2.9. Strategic Competency
2.10. Commitment Competency
3. Methodology
3.1. Measures and Constructs
3.2. Sampling and Data Collection
4. Analysis and Results
4.1. Measurement Model Analysis
4.2. Convergent Validity
4.3. Discriminant Validity
4.4. Common Method Bias and Causality
4.5. Structural Model Analysis
4.6. Results of Hypotheses Testing
5. Discussions and Conclusions
6. Limitations and Future Research Directions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
Appendix A
Constructs | Items | Statement |
---|---|---|
Relationship competency | RLC1 | Cultivate a trusting relationship with others in the long run |
RLC2 | Develop and maintain a personal network of professional contacts | |
RLC3 | Negotiate with others | |
Organizing and leading competency | OLC1 | Organize resources and tasks |
OLC2 | Motivate and lead subordinates | |
OLC3 | Delegate the tasks effectively | |
Learning competency | LNC1 | Keep me up-to-date in my field |
LNC2 | Learn proactively | |
LNC3 | Apply learned knowledge and skills to real-world situations | |
LNC4 | Learn to have a clear objective in mind | |
LNC5 | Able to learn from numerous sources | |
Opportunity competency | OPC1 | Be able to identify the goods and services that clients desire |
OPC2 | Perceive unmet demands of customers. | |
OPC3 | Enthusiastically look for products and services that deliver genuine benefits to the clients | |
Strategic competency | SGC1 | Determine the challenges, difficulties, and opportunities that will affect the organization in the long run |
SGC2 | Understand the predicted trends of the industry and how changes may affect own organization | |
SGC3 | Reorganize the department and organization to better accommodate long-term changes and goals | |
Commitment competency | CMC1 | Make a commitment to making the venture a success whenever possible |
CMC2 | Refrain from allowing the venture to fail when it is necessary | |
CMC3 | Retain an extraordinary robust internal drive | |
CMC4 | Make a commitment to long-term business objectives | |
CMC5 | Individual sacrifice to make the enterprise a success | |
Performance of SMEs | PSME1 | Return on investment |
PSME2 | Net profit from operations | |
PSME3 | Gross profit margin | |
PSME4 | Sales growth | |
PSME5 | Ability to fund business growth from profit | |
PSME6 | Return on an investment relative to competitors | |
PSME7 | Gross profit relative to competitors |
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Competency Domain | Behaviors of Entrepreneurs |
---|---|
Strategic competency | Entrepreneurs’ capacity to create, assess, and implement the strategy of the firms. |
Organizing and leading competency | The competency is connected to the organization of various firms’ resources, such as human, financial, physical, and technical resources, and includes activities such as team formation, employee leadership, controlling, and training. |
Opportunity competency | Entrepreneurs’ capacity to recognize, seek, and seize business opportunities. |
Commitment competency | Competencies that motivate entrepreneurs to keep going in business and to restart after a setback. |
Learning competency | The capacity to stay updated in relevant disciplines and to put what one has studied into practice. |
Relationship competency | The competency of building trustworthy relationships with suppliers, consumers, workers, rivals, government officials, and other stakeholders. |
Characteristics | Category | Frequency | Percent |
---|---|---|---|
Sex | Male | 77 | 77% |
Female | 23 | 23% | |
The current age of entrepreneurs | 20 and Under 20 | 10 | 10% |
21–27 | 64 | 64% | |
28–35 | 15 | 15% | |
36–42 | 10 | 10% | |
43–49 | 1 | 1% | |
Education level | Secondary | 20 | 20% |
Honors | 56 | 56% | |
Master’s | 24 | 24% | |
Any formal management/technical training before starting up/owning this business. | No | 69 | 69% |
Yes | 31 | 31% | |
Any formal management /technical training after starting up/owning this business. | No | 72 | 72% |
Yes | 28 | 28% | |
The ownership structure of the firm | Sole proprietorship | 68 | 68% |
Partnership | 27 | 27% | |
Private limited company | 5 | 5% |
Constructs | Items | Loadings | Cronbach | rho_A | CR | AVR |
---|---|---|---|---|---|---|
Relationship Competency | RLC1 | 0.909 | 0.935 | 1.017 | 0.956 | 0.880 |
RLC2 | 0.949 | |||||
RLC3 | 0.955 | |||||
Organizing and Leading Competency | OLC1 | 0.871 | 0.786 | 1.02 | 0.856 | 0.670 |
OLC2 | 0.638 | |||||
OLC3 | 0.919 | |||||
Learning Competency | LNC1 | 0.844 | 0.912 | 0.966 | 0.929 | 0.724 |
LNC2 | 0.91 | |||||
LNC3 | 0.843 | |||||
LNC4 | 0.898 | |||||
LNC5 | 0.75 | |||||
Opportunity Competency | OPC1 | 0.898 | 0.946 | 1.01 | 0.959 | 0.886 |
OPC2 | 0.962 | |||||
OPC3 | 0.962 | |||||
Strategic Competency | SGC1 | 0.884 | 0.796 | 0.858 | 0.865 | 0.684 |
SGC2 | 0.696 | |||||
SGC3 | 0.886 | |||||
Commitment Competency | CMC1 | 0.794 | 0.906 | 0.976 | 0.917 | 0.690 |
CMC2 | 0.919 | |||||
CMC3 | 0.849 | |||||
CMC4 | 0.889 | |||||
CMC5 | 0.682 | |||||
Performance of SMEs | PSME1 | 0.814 | 0.910 | 0.917 | 0.928 | 0.6480 |
PSME2 | 0.823 | |||||
PSME3 | 0.789 | |||||
PSME4 | 0.794 | |||||
PSME5 | 0.793 | |||||
PSME6 | 0.843 | |||||
PSME7 | 0.775 |
Constructs | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
---|---|---|---|---|---|---|---|
1. Commitment Competency | |||||||
2. Learning Competency | 0.453 | ||||||
3. Opportunity Competency | 0.450 | 0.361 | |||||
4. Organizing and Leading Competency | 0.400 | 0.286 | 0.444 | ||||
5. Performance of SMEs | 0.364 | 0.274 | 0.164 | 0.265 | |||
6. Relationship Competency | 0.360 | 0.283 | 0.746 | 0.467 | 0.330 | ||
7. Strategic Competency | 0.194 | 0.185 | 0.206 | 0.176 | 0.103 | 0.232 |
Hypothesis | Relations * | Std. Beta | Std. Error | t-Value | p-Value | Decision | VIF | R2 | f2 | Q2 |
---|---|---|---|---|---|---|---|---|---|---|
H1 | RLC →PSME | 0.403 | 0.116 | 3.478 | 0.001 | Supported | 2.191 | 0.409 | 0.125 | |
H2 | OLC → PSME | 0.232 | 0.103 | 2.237 | 0.025 | Supported | 1.288 | 0.07 | 0.247 | |
H3 | LNC → PSME | 0.413 | 0.19 | 2.178 | 0.029 | Supported | 4.287 | 0.04 | ||
H4 | OPC → PSME | −0.13 | 0.152 | 0.853 | 0.394 | Not supported | 2.036 | 0.014 | ||
H5 | SGC → PSME | −0.086 | 0.104 | 0.826 | 0.409 | Not supported | 1.102 | 0.011 | ||
H6 | CMC → PSME | 0.867 | 0.198 | 4.38 | 0 | Supported | 4.12 | 0.178 |
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Sakib, M.N.; Rabbani, M.R.; Hawaldar, I.T.; Jabber, M.A.; Hossain, J.; Sahabuddin, M. Entrepreneurial Competencies and SMEs’ Performance in a Developing Economy. Sustainability 2022, 14, 13643. https://doi.org/10.3390/su142013643
Sakib MN, Rabbani MR, Hawaldar IT, Jabber MA, Hossain J, Sahabuddin M. Entrepreneurial Competencies and SMEs’ Performance in a Developing Economy. Sustainability. 2022; 14(20):13643. https://doi.org/10.3390/su142013643
Chicago/Turabian StyleSakib, Md. Nazmus, Mustafa Raza Rabbani, Iqbal Thonse Hawaldar, Mohammad Abdul Jabber, Jubait Hossain, and Mohammad Sahabuddin. 2022. "Entrepreneurial Competencies and SMEs’ Performance in a Developing Economy" Sustainability 14, no. 20: 13643. https://doi.org/10.3390/su142013643