Effect of entrepreneurial orientation, market orientation and total quality management on performance Evidence from Saudi SMEs

• Published in: Benchmarking : an international journal Vol. 27; no. 4; pp. 1503 - 1531
• Main Authors: Ali, Gamal Abdualmajed, Hilman, Haim, Gorondutse, Abdullahi Hassan
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Group Publishing Limited 29.04.2020
• Subjects: Competition; Competitive advantage; Customer satisfaction; Developing countries; Economic development; Economic growth; Empirical analysis; Employment; Entrepreneurs; Entrepreneurship; GDP; Gross Domestic Product; LDCs; Multivariate statistical analysis; Organizational aspects; Orientation effects; Quality management; Small & medium sized enterprises-SME; Small business; Total quality; Total quality management; Value creation; Saudi Arabia; United Kingdom > UK; Wales
• ISSN: 1463-5771; 1758-4094
• DOI: 10.1108/BIJ-08-2019-0391

Purpose This study aims to examine the joint effect of entrepreneurial orientation (EO), market orientation (MO), total quality management (TQM) and organisational performance in the Kingdom of Saudi Arabia’s (KSA's) small and medium enterprise (SME) sector. Design/methodology/approach This paper used a quantitative research design. A total of 393 questionnaires were distributed to and collected from owners/managers of SMEs in KSA to acquire requisite data for examining the hypothesised model of the study. Partial least squares structural equation modelling was used to analyse the research data. Findings The results indicate that EO, MO and TQM are positively and significantly related to the organisational performance of SMEs. In addition, the findings reveal that TQM has contributed the most to the enhancement of organisational development, which is followed by EO and finally, MO. Practical implications Developing economies consider SMEs as an approach to generate new jobs and enhance economic growth. The results provide owners/managers, practitioners and academicians with an enhanced understanding of the relationship and effects of EO, MO and TQM on organisational performance, particularly in the SME sector. Thus, owners/managers are guided to develop improved and further effective decisions for the implementation of TQM practices with strong EO and MO. Consequently, firms realise superior performance and continuously compete within their market. Originality/value From the perspective of developing countries, this study contributes to the existing literature by providing empirical evidence regarding the effects of EO, MO, TQM and SMEs' performance. This study is the first to empirically examine the SME sector within the KSA's economy regarding the new orientation among decision makers in terms of increasing the significance of non-oil activities. This study also confirms the usability of resource-based view theory and strategic orientations variables in the KSA SMEs.