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determinants of small-business growth can be
classified into 3 dimensions: individual,
organization, and environment (Zhou and Wit,
2009), organizational resource factors, corporate
competence, organizational culture, and structure
(Covin and Slevin, 1991), competency factors for
individuals in entrepreneurial processes (Li, 2009),
owner/manager characteristic factors and strategies
(Nimalathasan, 2008; Sarwoko, 2013).
Research on the determinants of the SMEs
performance can be classified into three factors,
namely individual factors (individual characteristics,
competencies), organizational factors (strategy,
organizational characteristics), and environment
(Zhou and Wit, 2009). While the classic problems
faced by SMEs are marketing issues, including
market access, market information, market
expansion, diversification, and innovation, it is
necessary to improve the entrepreneurial orientation
of SME owners/managers.
1.1 Entrepreneurial Competency and
SMEs Performance
Baum (2001) defines entrepreneurial competence as
an individual characteristic such as the knowledge,
skills, and/or abilities required to perform a
particular job. Kiggundu (2002) expresses
entrepreneurial competence as a whole of
entrepreneurial attributes such as attitudes, beliefs,
knowledge, skills, abilities, personality, skills and
behavioral trends necessary to sustain and succeed
the business.
The ability (competence) owned by
owner/managers affects the growth of the company.
This competency is divided into two:
Personal competency. It is a combination of
educational background from the
owner/manager, experience, personal
character, and motivation.
Operational competency. Is an activity carried
out by the owner / manager in leading and
running his business.
Core competencies (technical skills, managerial
skills, social skills, human relations skills) positively
affect an entrepreneur's success (Kiggundu, 2002).
Baum et al. (2001) found that general competence
(organizational skills, opportunities skills) had no
significant effect on business growth, but had an
indirect positive impact through competitive
strategies on business growth.
The success of the business is influenced by the
skill and ability/competence of the owner/manager.
Understanding the role of entrepreneurs provides a
better insight into what competencies are required by
employers to ensure business survival and business
success (Akhmad, 2010).
H1: the stronger the competence of
entrepreneurship, the more the performance of
SMEs
1.2 Entrepreneurial Orientation and
SMEs Performance
The entrepreneurial orientation involves the
willingness to innovate, take risks, take independent
action, and be more proactive and aggressive than
competitors against new market opportunities
(Lumpkin and Dess, 1996). There are five
dimensions of entrepreneurial orientation, including
innovation, risk-taking, proactive, aggressiveness,
and autonomy as suggested by Lumpkin and Dess
(1990). Given the importance of entrepreneurship to
corporate performance, entrepreneurship orientation
can be an important measure of how companies are
managing to find and exploit market opportunities.
The typical conceptualization of
entrepreneurship orientation includes three
dimensions: proactive, risk-taking, and innovation
(Covin and Slevin, 1990).
H2: the stronger the entrepreneurship orientation,
the more performance SMEs
1.3 Entrepreneurial Competency and
Entrepreneurial Orientation
Entrepreneurial competencies of the owner/manager
are positively related to the entrepreneurial
orientation and its dimensions (Wickramaratne et al.,
2014). Critical factors of achieving the
entrepreneurial success outward look toward future,
strategic focus and intentional postures.
Entrepreneurs make decisions about their
entrepreneurial action depend on the judgments of
their competencies.
H3: orientation of entrepreneurship as a
mediation of the influence of entrepreneurial
competence in the performance of SMEs.
2 METHOD
The study was conducted on SMEs in Malang City,
Indonesia, by taking samples of 80
owners/managers.
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