UPSI Digital Repository (UDRep)
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Abstract : Universiti Pendidikan Sultan Idris |
The purpose of this study was to identify the leadership behaviour, entrepreneurial
orientation and organisational performance of Small and Medium Enterprises (SMEs) in Malaysia.
Three main constructs were selected namely leadership behaviour, entrepreneurial orientation and
organisational performance based on Resource Based Theory (RBT) by Galbreath (2005) and
Transformational Leadership Theory by Bass (1985). The research design used in this study was a
survey method and data were collected using quantitative approaches. The respondents were 401 owner
or manager of SMEs operating in manufacturing and service industries in Kuala Lumpur and Selangor.
The respondents were selected using the Stratified Sampling Technique. The study instrument applied
was questionnaires. The finding showed that transformational leadership has higher impact towards
organisational performance (β=0.257, S.E=0.055) than transactional leadership (β=0.220, S.E=0.054).
Entrepreneurial orientation also significantly contributed to organisational performance (β=0.199,
S.E=0.054). Furthermore, this study found that entrepreneurial orientation acted as partial
mediator between leadership behaviour and organisational performance (β=0.284, S.E= 0.256). The key
implications of this study revealed that transformational leadership proved to be more efficient
than transactional leadership in term of leadership behaviour. Thus, the leader of SMEs need to
practise and nurture the qualities of transformational leadership, and focus on entrepreneurial
orientation in order to achieve better organisational performance. This study also acknowledges the
leadership and entrepreneurial orientation as a resource and capability in organisation because the
integration of these two elements are the yardstick for SMEs’ success in Malaysia.
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