The impact of entrepreneurial orientation and transformational leadership on MSMEs performance

Abstract

This study was conducted on MSMEs in Kelantan assessing the impact of entrepreneurial orientation and transformational leadership on MSMEs business performance. Entrepreneurial orientation, characterized by innovation, proactivity, and risk-taking, is essential for MSMEs' adaptability and growth in dynamic markets. Similarly, transformational leadership, which inspires and motivates employees through vision, support, and intellectual stimulation, plays a critical role in enhancing organizational performance. Quantitative research design was employed, and data were collected from 146 MSMEs, and analyzed using the PLS-SEM technique. The finding indicates that entrepreneurial orientation has a significant influence on MSMEs’ business performance. However, transformational leadership does not have any significant influence on business performance. The study concludes that fostering entrepreneurial orientation within MSMEs can significantly enhance their performance, offering valuable insights for business owners, policymakers, and stakeholders aiming to promote the success of micro, small and medium enterprises.