The moderating effect of risk management practices on the relationship between entrepreneurial orientation and firm performance of Malaysian manufacturing SMEs / Roslida Abdul Razak

economic development. It is acting as the largest provider of employments, medium of
poverty reduction and competitive and efficient market. Yet to date, the valuable and
proficient contributions of the SME unachievable and little is known. SMEs are also
leading by some challenges and facing dynamic nature of a highly global economy.
One of the key factors that need to be possessed in ensuring firm‘s longevity in
today‘s competitive landscape is Entrepreneurial Orientation (EO). However, the role
of EO in relation to the performance relationship, especially Malaysian SMEs is still
an area of confusion. Studies have pointed out that there are still doubts about EO that
attract the interest of many researchers and certain areas remain unexplored. Thus, the
present thesis serves as a bridge to fill the gap, remedy the undiscovered of the
empirical findings and provides a deeper understanding of the cross-functional
activities in the behaviour-embedded nature of EO construct and expanding on its five
sub-constructs (Innovativeness, Pro-activeness, Competitive Aggressiveness,
Autonomy and Self-Renewal Activities) by evaluating the effects of the EO on firm
performance (FP). Theoretically, the objective of the study is to demonstrate the value
of EO model as independent variables, and by considering risk management practices
(RMP) as a moderating variable which is potentially influential on the relationship
between EO and FP. Empirical assessment of the theoretical framework includes a
survey of 272 manufacturing SMEs. The sampling technique used was the stratified
random sampling. The resulting data were analysed using the SPSS for Windows
Version 20.0 and multivariate analysis namely, AMOS 20.0. The finding enhances our
understanding of EO in several ways. The results indicated: (1) EO and all its sub
constructs excluded Autonomy had a significant effect on FP, (2) innovativeness was
the most significant which influences FP, and (3) the effect of EO and its sub
dimensions and FP were moderated by RMP. The results also contributed to the
existing body of knowledge in the form of methodological contribution. The research
method process used was the second-generation methods of multivariate analysis,
namely SEM. Nevertheless, with regards to practical implication, this current research
offers indication to the relevancy of SME and managerial approaches or best practices
to the SMEs in manufacturing industry in dealing with the RMP.