Title: Relationship of entrepreneurial orientation and innovation performance of SMEs using PLS-SEM

Authors: Shuja Iqbal; Hongyun Tian; Sikandar Ali Qalati; Shamim Akhtar; Arqam Javed Kayani

Addresses: School of Management, Jiangsu University, Zhenjiang, Jiangsu, China; Lahore Business School, The University of Lahore, Lahore, Punjab, Pakistan ' School of Management, Jiangsu University, Zhenjiang, Jiangsu, China ' School of Management, Jiangsu University, Zhenjiang, Jiangsu, China ' School of Management, Jiangsu University, Zhenjiang, Jiangsu, China ' Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia; Lahore Business School, The University of Lahore, Lahore, Punjab, Pakistan

Abstract: Small and medium-sized enterprises (SMEs) are engines of growth for developing economies. Every SME desires to enhance the business and retain a prominent position in the market. The entrepreneurial orientation plays a critical role in enhancing the innovation performance of SMEs. This study explores the critical role of entrepreneurial orientation and its characteristics concerning the optimised organisational commitment and innovation performance of SMEs in developing economies. This study collected data from 177 employees of SMEs and analysed it using partial least square structured equation modelling in Smart PLS software. The study's findings revealed that risk-taking, innovativeness, motivation, proactiveness, aggressive competition, and autonomy enhance the firms' organisational commitment and innovation performance. Moreover, the findings revealed a decisive mediating role of organisational commitment between the relationship of entrepreneurial orientation and innovation performance. This study helps SMEs' managers develop strategies to enhance their firms' abilities with their employees' increased commitment by valuing their innovative ideas and achieving higher innovation performance.

Keywords: entrepreneurial orientation; innovation performance; organisational commitment; transformational leadership; small and medium size enterprises.

DOI: 10.1504/MEJM.2022.122573

Middle East Journal of Management, 2022 Vol.9 No.3, pp.265 - 293

Received: 19 Feb 2021
Accepted: 25 Feb 2021
Published online: 03 May 2022 *

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