**1. Introduction**

Entrepreneurship has become a key part of economies, and having an entrepreneurial orientation is essential for success [1]. Lumpkin and Dess [2] defined entrepreneurial orientation (EO) as the process, practices, and decision-making activities that lead to new entry [2]. According to Lumpkin and Des's entrepreneurial decision-making practices, methods and styles are portraying due firm's strategic orientation. Another researcher similarly described that the above are closely related to the strategic decision-making process and strategic management [3]. Decision-making activities, practices, and strategic orientations reflect directions of behaviors chosen by entrepreneurs. Lumpkin and Dess [2]

**Citation:** Alam, S.S.; Md Salleh, M.F.; Masukujjaman, M.; Al-Shaikh, M.E.; Makmor, N.; Makhbul, Z.K.M. Relationship between Entrepreneurial Orientation and Business Performance among Malay-Owned SMEs in Malaysia: A PLS Analysis. *Sustainability* **2022**, *14*, 6308. https://doi.org/10.3390/ su14106308

Academic Editors: José-María Montero, Pedro Antonio Martín Cervantes and María del Carmen Valls Martínez

Received: 16 April 2022 Accepted: 17 May 2022 Published: 22 May 2022

**Publisher's Note:** MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

also refer to entrepreneurial orientations as entrepreneurial behaviors. Based on those definitions, entrepreneurial orientations can be described as the directions of actions and practices which project a firm's strategic movement for the future.

Research on entrepreneurial orientation has remarkably grown in the international business research arena. Entrepreneurial orientation has also been the basis for several studies in many countries. Runyan et al. [4] studied the USA and China. Zhai et al. [5] studied China. Keh et al. [6] studied Singapore. Sapienza, De Clercq, and Sandberg [7] studied Belgium. Galbreath et al. [8] studied Italy. Rezeai and Ortt [9] studied the Netherlands. These researchers suggested that EO and dimensions may differ in different cultures and different countries. Companies operating within a certain country's borders will not always operate in the same way as companies in other countries. [8]. Researchers also suggested that models that may be developed in one country must be examined in another country. It can be argued EO is relevant to the study of entrepreneurship and EO has unique characteristics so cross-cultural validation might be better for further research [10,11]. From this point of view, we studied Malay-based SMEs in Malaysia.

Small and medium-sized firms (SMEs) play a substantial and crucial role in the economic growth of many nations across the world, particularly in developing economies. Globalization has lowered economies of scale, increasing the growth potential for SMEs [12]. Small and medium-sized enterprises (SMEs) in developing countries must contend with dynamic, ever-changing, and less established institutional environments. Due to their size and lack of industrial possibilities, SMEs in underdeveloped countries rely heavily on informal, social, and political connections. In order to deal with these ordeals, SME owners' leadership orientation, which refers to their entrepreneurial orientation techniques, acts as a prelude to effective company performance [13].

Several recent studies have emphasized the need for more study into the interdependence between strategic orientations and other explanatory factors of entrepreneurial performance [14]. Small and medium-sized enterprises (SMEs) performance refer to the results of their business activity. According to Abebe's [15] study, small and medium-sized enterprises (SMEs) with a strong entrepreneurial orientation are more likely to succeed. Specifically, Hakala [16] proposes a "complimentary approach" to studying strategic orientations, focusing on the links between them and the patterns they produce.

The Malaysian economy relies heavily on small and medium-sized businesses (SMEs), which account for 38 percent of the country's GDP or more than MYR 500 billion (GDP) [17]. Around 97.2 percent of Malaysia's businesses are small and medium-sized enterprises (SMEs), and they employ close to 70 percent of the country's workers [17]. The Malaysian government pays particular attention to local businesses through programs such as the Bumiputera Enterprise Enhancement Program (BEEP) and the Tunas Usahawan Belia Bumiputera Program (TUBE), which aim to generate jobs and increase exports. This sector has a high number of entrepreneurs, fueled by the government's many incentives and Malaysia's position.

Malays are the predominant race among the multi-racial country in Malaysia. Chinese and Indians are the other two races. Malays are not very skillful as they join in business later, are not capable of surviving, and do not have much experience [18]. During British colonial rule in Malaysia, British rulers favored the Chinese community to enter the mainstream of Malaysian business and economy [18]. As a result, Malays are now lagging behind. People of Chinese descent are now controlling the Malaysian economy and business. This has resulted in a huge disparity between Malay and Chinese in the areas of education, entrepreneurship, and employment [18]. However, there must be a particular research focus on their business performance and possible factors. A few studies were conducted on entrepreneurial orientation and firm performance from a Malaysian perspective. Malaysian researchers conducted similar research on micro-enterprises [19] and on the retail industry [20]; however, they ignored the Malay origin entrepreneurs. To meet Malaysia's vision to uplift the Malaysian people to the mainstream, it is essential to know how entrepreneurial orientation relates to their business performance. Here, there

are research gaps to explore. This research, therefore, seeks to fill that gap by examining the relationship between EO and the firm performance of Malay-based SMEs in Malaysia. With this, present research enriches the EO and SME literature by contributing specific insight (Malay origin case) which will be helpful for other nations in predicting their under-nourished segment of people.

The remainder of the article is organized as follows: The next part reviews existing research on the association between entrepreneurial orientation and SME success and section third develop our study's hypothesis. A description of how we collected the data and operationalized our construct measurements can be found in the fourth section. Section 5 presents our study's findings and Section 6 discusses the results. The Section 7 is dedicated to discussing the limits of our findings and recommending additional study directions. Section 8 brings an end to the investigation.
