INFLUENCE OF ORGANIZATTIONAL SUPPORT ON ENTREPRENEURSHIP PERFORMANCE OF SMEs: A CASE OF MALAYSIAN HERBAL INDUSTRY

Abstract

Activities of small and medium sized enterprises (SMEs) have contributed significantly to environmental degradation that causes a disastrous effect on us and our future generation. Considering this, sustainable entrepreneurship practice has been promoted as a resolution of ecological problems capable of addressing climate change issues, public health, and safety concerns, and has become critical for competing in international markets. Pollution was exclusively identified causing environmental degradation among the upstream and downstream players in Malaysian herbal industry. In response, the Malaysian government focused on ensuring that SMEs produce products through safe and environmentally friendly practices. Literature suggests that organizational support influences the entrepreneurship practices of SMEs, hence provide them the impetus to achieve competitive advantage regarding turnover, customer attraction and market share opportunities to achieve business performance. Nonetheless, the implementation of sustainable entrepreneurship practices among the SMEs is still low due to numerous challenges. This paper intends to investigate the influence of organizational support on the entrepreneurship practices towards performance among SMEs in the Malaysian herbal industry. 300 herbal-based SMEs were surveyed using structured questionnaire. Data was analysed using descriptive statistics, exploratory factor analysis, confirmatory factor analysis, and structural equation model. The results show that organizational support have a positive effect on entrepreneurship practices and performance among the SMEs, accounting for 28% and 45% variance respectively. This finding reveals that organizational support is significantly related to entrepreneurship performance, thus substantiates previous findings on the crucial roles of organizational support in enabling organizations to achieve sustainable entrepreneurship performance. This study contributes to triple bottom line literature based on incorporation of strategic choice theory and resource-based view theory in entrepreneurship framework.